Monday, October 28, 2013
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There is not much on the economic or earnings calendars this
) reports after the close today and the rest of this week packs
another busy line-up of Q3 releases. Importantly, this week's Fed
meeting isn't expected to user in the Taper, but we may get some
clues to the central bank's thinking on that key question.
The Fed surprised the markets last month with its non-Taper
decision and no one expects them to make an announcement on that
front on Wednesday at the conclusion of their two-day meeting.
The consensus expectation is for no changes to the QE program at
least through March next year, given data issues in the wake of
government shutdown and the coming leadership change at the Fed.
Many in the market would be hoping that the coming episode of
budget brawl in Washington early in 2014 would push back the
Taper even further. Any commentary in the Fed's post-meeting
statement on Wednesday about the shutdown's impact on the economy
will be read for clues about their next step.
Apple is in the spotlight on the earnings front today. Zacks
Earnings ESP or Earnings Surprise Prediction, our proprietary
leading indicator of earnings surprises, is showing the iPhone
maker coming out with a positive earnings surprises this evening.
Consensus estimates have been steadily moving in recent days,
with the current Zacks Consensus estimate of $7.89 up 3 cents in
the past week and 5 cents in the past month.
Including this morning's reports from
), we now have Q3 results from 248 S&P 500 members that
combined account for account for 56.1% of the index's total
market capitalization. Total earnings for these 248 companies are
up +7.8%, with 68.1% coming ahead of consensus earnings
expectations. Total revenues are up +3.4% and 48% are beating
top-line expectations. This is better performance, particularly
on the earnings side, than what this same group of companies
reported in Q2 and the 4-quarer average. Revenue growth and beat
ratios are bit a weaker relative to Q2, but not by much.
The composite earnings and revenue growth rates for Q3, combining
the results for the 248 companies that have reported with the 252
still to come, are +3.3% and +1.3%, respectively. This puts Q3's
earnings growth rate on track to be along the lines of what we
saw in the first two quarters of 2013, likely a little better.
Expectations for 2013 Q4 have started coming down, but they still
represent a material ramp up in the growth pace, with total
earning for the S&P 500 expected to be up +8.9%, down
from +9.1% last week and higher than +10% at the start of the
Director of Research