“Better than Expected”…Done!

In The Weekly Update for 5/5/2023 (Read it Here) I titled the issue “Better than Expected” and then detailed how, in my opinion, the earnings of Corporate America, as measured by  the S&P 500 would be much better than predicted.

Well, good news!  With all but 50 of the 500 companies reporting Earnings Per Share (EPS) 75% beat revenue projections and 79% beat EPS!

Here is the summary:

Source: LPL Financial 5/22/2023

How could companies beat EPS when inflation inputs are off-the-chart high?  Well, as detailed in Sign #7 of The Seven Signs of a Changing Economy™ for May 2023 (Read it Here).  I detailed how input costs (inflation) is dropping off a cliff and adding to the revenues and profits of Corporate America.

Here is the detail:

Anything is possible but maybe the facts are that the financial news is “off” and Corporate America is game “on”!

If one were to back out the top five companies in the S&P 500, the so called “FAANG” stocks (just do a search), the S&P 500 now trades at 14x EPS, i.e., historically bargain buy in prices.

I’m interested in your thoughts, comments, and observations.  Feel welcome to call, email, or stop by the office and say Hi.

Respectfully,

James O. Lunney, CFP®

CERTIFIED FINANCIAL PLANNER™ Professional  

Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.