{"id":531,"date":"2023-02-08T15:02:25","date_gmt":"2023-02-08T20:02:25","guid":{"rendered":"https:\/\/embarrdowns.com\/sp-500-earnings-continue-to-decline-ahead-of-fomc-meeting\/"},"modified":"2023-02-08T15:02:26","modified_gmt":"2023-02-08T20:02:26","slug":"sp-500-earnings-continue-to-decline-ahead-of-fomc-meeting","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/sp-500-earnings-continue-to-decline-ahead-of-fomc-meeting\/","title":{"rendered":"S&P 500 Earnings Continue to Decline Ahead of FOMC Meeting"},"content":{"rendered":"

The fourth quarter earnings season has been subpar for the S&P 500, with 70% of companies beating Wall Street estimates and an average earnings surprise of 0.6%.[0]<\/a><\/sup> This is below the five-year average of 77% and 8.6%, respectively, and the decline is expected to worsen as companies with more international revenue exposure continue to report.<\/p>\n

Intel Corp INTC, Alphabet Inc GOOG, Meta Platforms Inc META, and Apple Inc AAPL are four of the largest contributors to the larger earnings decline for S&P 500 companies with more international revenue exposure.[1]<\/a><\/sup> If these companies were excluded, the blended earnings growth rate for S&P 500 companies that generate more than 50% of revenues outside the U.S. would improve to 4.4% from 2.4%.[2]<\/a><\/sup><\/p>\n

Meanwhile, the Federal Reserve is expected to raise short-term interest rates by 0.25% at the end of its two-day FOMC meeting on Wednesday.[3]<\/a><\/sup> The outcome will likely be less captivating to markets than the comments from Chair Powell as investors try to gauge the odds that the fight against inflation could end in recession.[4]<\/a><\/sup> Friday\u2019s jobs report was robust, with nonfarm payrolls soaring by 517,000 and the unemployment rate falling to a cycle low of 3.4%.<\/p>\n

This week\u2019s events, along with the expectations of a quarter point increase in March, will be closely watched by investors who are hoping that the Fed\u2019s tightening cycle might end sooner than expected. The blended earnings decline for the S&P 500 for Q4 2022 is currently -5.0% and should provide more insight into the economic outlook.[5]<\/a><\/sup><\/p>\n

0. <\/span>“S&P 500: 11 Companies Just Demolished Analysts’ Profit Forecasts | Investor’s Business Daily” Investor’s Business Daily, 6 Feb. 2023, https:\/\/www.investors.com\/etfs-and-funds\/sectors\/sp500-companies-just-demolished-analysts-profit-forecasts\/<\/a><\/a><\/p>\n

1. <\/span>“Most Important Week Of Earnings Season Is Here \u2014 Will S&P 500 Companies Continue Beating Wall Street Esti” Benzinga, 31 Jan. 2023, https:\/\/www.benzinga.com\/news\/earnings\/23\/01\/30640585\/most-important-week-of-earnings-season-is-here-will-s-p-500-companies-continue-beating-wall-street<\/a>–<\/a><\/p>\n

2. <\/span>“FactSet Research : S&P 500 Companies With More Global Exposure Reporting Lower Earnings and Sales in Q4” Marketscreener.com, 30 Jan. 2023, https:\/\/www.marketscreener.com\/quote\/stock\/FACTSET-RESEARCH-SYSTEMS-12584\/news\/FactSet-Research-S-P-500-Companies-With-More-Global-Exposure-Reporting-Lower-Earnings-and-Sales-in-42848990\/<\/a><\/a><\/p>\n

3. <\/span>“Week Ahead: A Bullish Pattern Hangs in Balance this Busy Week – Alpha Profit” Christophe Barraud, 29 Jan. 2023, https:\/\/www.christophe-barraud.com\/week-ahead-a-bullish-pattern-hangs-in-balance-this-busy-week-alpha-profit<\/a><\/a><\/p>\n

4. <\/span>“Earnings Update And GDP Is As Good As It Gets” Forbes, 29 Jan. 2023, https:\/\/www.forbes.com\/sites\/bill_stone\/2023\/01\/29\/earnings-update-and-gdp-is-as-good-as-it-gets<\/a><\/a><\/p>\n

5. <\/span>“What’s Up With Corporate Earnings And Jobs?” Forbes, 5 Feb. 2023, https:\/\/www.forbes.com\/sites\/bill_stone\/2023\/02\/05\/whats-up-with-corporate-earnings-and-jobs\/<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The fourth quarter earnings season has been subpar for the S&P 500, with 70% of companies beating Wall Street estimates and an average earnings surprise of 0.6%.[0]<\/a><\/sup> This is below the five-year average of 77% and 8.6%, respectively, and the decline is expected to worsen as companies with more international revenue exposure continue to report.<\/p>\n

Intel Corp INTC, Alphabet Inc GOOG, Meta Platforms Inc META, and Apple Inc AAPL are four of the largest contributors to the larger earnings decline for S&P 500 companies with more international revenue exposure.[1]<\/a><\/sup> If these companies were excluded, the blended earnings growth rate for S&P 500 companies that generate more than 50% of revenues outside the U.S. would improve to 4.4% from 2.4%.[2]<\/a><\/sup><\/p>\n

Meanwhile, the Federal Reserve is expected to raise short-term interest rates by 0.25% at the end of its two-day FOMC meeting on Wednesday.[3]<\/a><\/sup> The outcome will likely be less captivating to markets than the comments from Chair Powell as investors try to gauge the odds that the fight against inflation could end in recession.[4]<\/a><\/sup> Friday\u2019s jobs report was robust, with nonfarm payrolls soaring by 517,000 and the unemployment rate falling to a cycle low of 3.4%.<\/p>\n

This week\u2019s events, along with the expectations of a quarter point increase in March, will be closely watched by investors who are hoping that the Fed\u2019s tightening cycle might end sooner than expected. The blended earnings decline for the S&P 500 for Q4 2022 is currently -5.0% and should provide more insight into the economic outlook.[5]<\/a><\/sup><\/p>\n

0. <\/span>“S&P 500: 11 Companies Just Demolished Analysts’ Profit Forecasts | Investor’s Business Daily” Investor’s Business Daily, 6 Feb. 2023, https:\/\/www.investors.com\/etfs-and-funds\/sectors\/sp500-companies-just-demolished-analysts-profit-forecasts\/<\/a><\/a><\/p>\n

1. <\/span>“Most Important Week Of Earnings Season Is Here \u2014 Will S&P 500 Companies Continue Beating Wall Street Esti” Benzinga, 31 Jan. 2023, https:\/\/www.benzinga.com\/news\/earnings\/23\/01\/30640585\/most-important-week-of-earnings-season-is-here-will-s-p-500-companies-continue-beating-wall-street<\/a>–<\/a><\/p>\n

2. <\/span>“FactSet Research : S&P 500 Companies With More Global Exposure Reporting Lower Earnings and Sales in Q4” Marketscreener.com, 30 Jan. 2023, https:\/\/www.marketscreener.com\/quote\/stock\/FACTSET-RESEARCH-SYSTEMS-12584\/news\/FactSet-Research-S-P-500-Companies-With-More-Global-Exposure-Reporting-Lower-Earnings-and-Sales-in-42848990\/<\/a><\/a><\/p>\n

3. <\/span>“Week Ahead: A Bullish Pattern Hangs in Balance this Busy Week – Alpha Profit” Christophe Barraud, 29 Jan. 2023, https:\/\/www.christophe-barraud.com\/week-ahead-a-bullish-pattern-hangs-in-balance-this-busy-week-alpha-profit<\/a><\/a><\/p>\n

4. <\/span>“Earnings Update And GDP Is As Good As It Gets” Forbes, 29 Jan. 2023, https:\/\/www.forbes.com\/sites\/bill_stone\/2023\/01\/29\/earnings-update-and-gdp-is-as-good-as-it-gets<\/a><\/a><\/p>\n

5. <\/span>“What’s Up With Corporate Earnings And Jobs?” Forbes, 5 Feb. 2023, https:\/\/www.forbes.com\/sites\/bill_stone\/2023\/02\/05\/whats-up-with-corporate-earnings-and-jobs\/<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":530,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/531"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=531"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/531\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/530"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=531"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=531"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=531"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}