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S&P 500 Companies are Increasing Earnings Estimates

A late-day rally on Friday ended a volatile week that pushed the S&P 500 to new all-time highs. The tech-heavy Nasdaq fared worse dropping almost .6%. Investors are still concerned over the steep runup in tech shares during the pandemic and may be focusing on sectors that may benefit from the government’s stimulus spending.
The second quarter is just a few days away, and we all know what that means; first quarter 2021 earnings announcements. 94 S&P 500 companies have provided guidance for first-quarter results, of those, over 60% (56) have been revisions to the upside. That’s above the five-year average of 35 and could bode well for investors.
In addition, 86 S&P 500 companies have issued guidance for first-quarter revenue. 69 of those companies are issuing positive revenue guidance while only 17 have issued negative guidance. Those figures are also above the five-year average.
The chart below shows the sharp spike in positive guidance on the far right column.
First quarter 2021 earnings season will begin in a couple of weeks. If you have any questions, please contact me.
The Markets and Economy
  • For the second time in recent history, there are more real estate agents than there are homes available for sale in the U.S. The last time this happened was December 2019.
  • In a prepared statement before the House Financial Services Committee last week, Fed Chairman, Jerome Powell reiterated that the U.S. economy’s recovery remains far from complete despite recent improvement. “The recovery has progressed more quickly than generally expected and looks to be strengthening, but the recovery is far from complete, so at the Fed, we will continue to provide the economy the support that it needs for as long as it takes.” The Chairman also said, “We might see some upward pressure on prices, Our best view is that the effect on inflation will be neither particularly large nor persistent.”
  • Existing home sales dropped 6.6% in February compared to January. The record-low number of homes for sale is limiting purchases as we head into the typically strong spring selling season. While sales were down from last month, they were up 9.1% from February 2020.
  • Consumer spending cooled last month as Americans waited for federal stimulus checks to hit their bank accounts. Household spending in the U.S. fell 1% in February. Economists blamed the drop in spending on winter weather affecting much of the country but believe spending will accelerate once many taxpayers begin to receive their stimulus money.
  • Maybe things aren’t that bad. Banks repossessed 1,428 homes nationwide in January of this year. In contrast, 78,133 homes were repossessed nationwide in January 2011.
  • According to the World Bank, the global total fertility rate has been cut in half over the last 50 years, falling from 4.922 births per woman in 1968 to 2.415 births per woman in 2018.
  • Auto dealers entered 2021 hoping to restock dealerships depleted by pandemic-related factory shutdowns last spring. Instead, parts shortages and other factors are disrupting production schedules. One major part in short supply is computer chips. The end result is less inventory and higher prices for buyers.
  • Jobless claims reached their lowest level of the pandemic two weeks ago as stronger hiring and consumer spending continues to drive the U.S. economic rebound.
  • JP Morgan Chase CEO, Jaime Dimon forecasted on March 1, 2021 that “There’s a very good chance you’re going to have a gangbuster economy for the rest of 2021 and easily into 2022.”


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The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Consult your financial professional before making any investment decision. You cannot invest directly in an index. Past performance does not guarantee future results.
Note: All figures exclude reinvested dividends (if any). Sources: Bloomberg, Dorsey Wright & Associates, Inc., and The Wall Street Journal. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.
Securities offered through Triad Advisors, member FINRA/SIPC. Investment advice offered through Resources Investment Advisors, LLC, an SEC-registered investment adviser. Resources Investment Advisors. LLC and Vertical Financial Group are not affiliated with Triad Advisors.

David M. Kover, Thomas H. Parker, Bradford E. Harris, Laura T. Scobee, Joseph B. Thaman & Brett M. Dankowski are registered to recommend securities offered through Triad Advisors, member FINRA/ SIPC. Investment advice offered through Resources Investment Advisors, Inc., an SEC-registered investment adviser. Resources Investment Advisors, Inc. and Vertical Financial Group are not affiliated with Triad Advisors.