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Corporate America Keeps Adding To Earnings Upside

Corporate America Keeps Adding To Earnings Upside

April 28, 2021

Corporate America Keeps Adding To Earnings Upside

  • With about 25% of S&P 500 Index companies having reported, first quarter earnings are tracking to a 34% year-over-year increase, an impressive 10 percentage points above March 31 estimates.
  • S&P 500 revenue is on track to grow 7.4% year over year, more than one percentage point above March 31 estimates, led by technology’s expected 16% increase.
  • Earnings estimates for the index over the next four quarters have risen by an impressive 1.4% to over $185 per share since earnings season began.
  • This week is the busiest of the season with over 180 S&P 500 companies slated to report.

View enlarged chart.

Daily Insights

U.S. stocks begin a big week of corporate earnings little changed following Friday’s growth surge

  • European markets are mixed with the German DAX
  • Asian markets were mostly lower with Japan outperforming on strength from semiconductors.

Is all the good news priced in?

In last week’s Weekly Market Commentary we discussed whether stock prices might be reflecting peak optimism. This week we tackle that same topic of peak optimism, but by looking at some valuation metrics. While valuations are elevated with a lot of good news is priced in, they still appear reasonable when factoring in interest rates and inflation. See today’s Weekly Market Commentary for details, available at 1p.m. ET.

Week ahead. This week the following economic data is slated to be released:

Technical update

The S&P 500 broke a 4 week streak of +1% gains last week, but a Friday rally pushed it to only a marginal loss for the week and back within a hair of all-time highs. Markets are mostly quiet this morning, but copper is breaking out of a two-month consolidation to its highest price in 10 years, a positive macro signal.

COVID-19 news

The United States reported 34,000 new COVID-19 cases on Sunday, down 19% from Sunday and marking the eleventh straight week over week decline (source: New York Times).

  • Northern states that previously had seen a surge in cases are now seeing a decline. Oregon now the only state reporting a rapid rise in cases over the past week.
  • The pace of vaccinations has dipped under 3 million per day, but over half of the adult population in the U.S. has received at least one dose of the vaccine.

Some Pros and Cons

On the LPL Market Signals podcast, Chief Market Strategist Ryan Detrick discusses some potential worries, why any weakness could be a buy the dip opportunity, and Sustainable Investing this Earth Day.

 

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This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index and market data are from FactSet and MarketWatch.

This Research material was prepared by LPL Financial, LLC.

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