
The S&P 500 has officially shaken off its earnings recession, surging back with a vengeance in a stunning financial turnaround!
After a nail-biting series of declines, the latest third-quarter earnings results have catapulted the index out of the doldrums, marking a historic comeback in the annals of Wall Street.
In an astonishing display of resilience, 92% of S&P 500 companies have reported their earnings for the third quarter, and the numbers are nothing short of remarkable.
A whopping 82% of these corporate juggernauts smashed profit estimates by a median of 7%, while a solid 59% outdid sales expectations by 3%, as per Fundstrat data.
This remarkable performance has propelled the S&P 500 towards a 5% year-over-year profit growth – a figure that leaves earlier flat-growth forecasts eating dust.
Raymond James, the financial wizard, has confirmed this seismic shift with a chart that’s sending shockwaves across the market.
Their analysis reveals that the S&P 500 is experiencing its best quarter of earnings growth since the golden days of Q2 2022.
The previous three quarters, marred by EPS declines of -4%, -1%, and -3%, are now just a distant memory as the index has rocketed up by an incredible 15% year to date.
But the real heroes of this financial saga?
The tech titans, the mighty MAGMAN – Microsoft, Apple, Alphabet, Meta, Amazon, and Nvidia.
These powerhouses have not only showcased a staggering 55% year-over-year earnings growth in the third quarter but are also poised for a jaw-dropping 35% full-year 2023 profit growth.
They’ve outperformed the S&P 500 threefold, with nearly 20% beats in the third quarter, proving that their success is built on rock-solid fundamentals.
However, stripping away the glittering performance of MAGMAN, and the S&P 500 reveals a more sobering reality, with a roughly 1% earnings decline in the third quarter.
And with the era of stock buybacks fading fast, thanks to soaring interest rates, investors are advised to brace for a future where profit growth won’t be fueled by these financial maneuvers.
Buybacks have plummeted by a staggering 50% since their peak in Q1 2022, signaling a shift in the market dynamics.
But fear not, market watchers!
Analysts are painting a rosy picture for 2024, forecasting an acceleration in earnings per share gains to a robust 11% by Q2.
This optimistic outlook is a beacon of hope for investors, signaling that the S&P 500’s comeback is just the beginning of a new, bullish chapter in the market’s history.