90 Day Treadmill Under Way !

For those new to our writings and as a short refresher to regular’s, we monitor quarterly earnings expectations and results as a way to gauge the health of the current economy as well as the capital markets. Our pseudo negative term, “90 Day Treadmill” comes from the constant push from wall street to meet expectations on a quarterly basis, which is somewhat short-sighted but constant.

At the commencement of earnings season, according to Thomson Reuters here are the expected numbers:

Overall for Q1 2012, earnings for the S&P 500 are expected to grow a meager 3%, much slower than the last several quarters.

Top 3 Expected Growth Sectors:

  • Industrials  10.8%
  • Financials  8%
  • Technology  7.8%

Bottom 3 Expectations:

  • Telcom  -14.4%
  • Materials -12.9%
  • Utilities  -9.3%

The S&P 500, according to Thomson Reuters is currently trading at a 15.1 P/E which is near the long-term average. Given the slow growth expectations and an election year, this may be a stretch in valuation unless earnings surprise.

Have a Great Day and a Super Weekend!




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