Estimated Q3 Sector Earnings Growth

Alcoa (AA) kicks off the third quarter reporting period next Thursday after the close.  Below we highlight the current bottoms up sector year over year growth estimates for Q3 2010.  As shown, the S&P 500 as a whole is expected to see Q3 EPS growth of 23.6% versus 2009.  The Financial sector, as beaten down as it is, is expected to see the biggest Q3 '10 growth at 48%.  Industrials, Technology, Energy, and Materials are the other four sectors expected to outgrow the S&P 500.  Consumer Discretionary is just below the index as a whole with an estimate of 22.5%, and then Utilities, Health Care, Consumer Staples, and Telecom are expected to see little or no growth.

With earnings season just a week away, it's important to be prepared for the barrage of reports that come out on a daily basis for multiple weeks.  Our Interactive Earnings Report Database is the best way to stay on top of earnings season.  The database allows you to pull up the past quarterly reports for nearly every US stock and see how the stock typically trades under various earnings scenarios.  If Apple beats estimates and gaps higher, you can pull all prior times that this has happened and see how the stock did going forward.  You can easily filter the entire database to find potential trade ideas around earnings reports as well.  You can learn more about the database here, and feel free to contact us with any other questions you might have.  To access the database, become a Premium Plus subscriber today.

Comments

[theyenguy]

In my linked Financial Market News Report for September 29, 2010, I relate that The European Central Bank’s EU Banking Sector Stability Report for September 2010 released September 29, 2010, relates funding challenges for a number of banks: “Conditions in both short and long-term funding markets were still far from normal in August 2010, and funding challenges for some banks remained substantial. Looking ahead, one area of concern is the risk of bank bond issuance being crowded out as a result of the significant increase in financing needs of several EU governments in the period ahead. In addition, banks may also face the prospect of higher funding costs owing to the need to term out their funding and because of increasing competitive pressures in markets for retail deposits. Moreover, the continued reliance of some banks on central bank refinancing facilities remains a source of concern.” This report turned European Financials, EUFN, 0.87% lower; which in turn, induced Banks, KBE, 0.48% lower.

Today, September 29, 2010, the market correlates inversely with the US Dollar, $USD, and together with the Euro, FXE. Regional news such as this may cause the currency traders to sell the EUR/JPY from 114.05, seen in FXE:FXY, which would turn the S&P, SPY, and world stock market, ACWI, lower, before earning reports come forth the first Thursday, in October 2010.

The US Dollar, $USD, is terrifically oversold; its rise would devastate world shares and the S&P.

Said another way the current stock market has been funded by US Federal Reserve POMO and Plunge Protection Team, PPT, operations, and by euro yen carry trade investing, and other yen carry trade investing. If the carry trades are removed, stocks will fall.