Author Archives: Ted Kavadas

Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” report of September 11, 2020:

from page 22:

(click on charts to enlarge images)

S&P500 forecast EPS

from page 23:

S&P500 EPS 2010-2021

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Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of September 17, 2020, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

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RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

The September 2020 Wall Street Journal Economic Forecast Survey – Notable Aspects

The September 2020 Wall Street Journal Economic Forecast Survey was published on September 10, 2020. The headline is “WSJ Survey: Overall Economy Is Recovering Faster Than Economists Expected.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

An excerpt:

The projected rebound for the third quarter would recoup about half of the output lost in the first half of the year. To return to the previous peak recorded in the final quarter of last year, the economy would need to grow at a roughly 24% rate again in the fourth quarter of this year. Economists see that as unlikely: Their forecast for fourth-quarter growth is for a 4.9% annual rate, suggesting the recovery will be protracted.

The average forecast called for GDP to shrink 4.2% this year, measured from the fourth quarter of 2019, an improvement from the 5.3% contraction predicted in last month’s survey.

Nonetheless, the U.S. economy would still be on track to contract in 2020 by the most since contemporary records began in 1948, as measured from the fourth quarter of the prior year. By comparison, in the fourth quarter of 2008—during the financial crisis—GDP contracted just 2.8% from the prior year.

As seen in the “Recession Probability” section, the average response as to whether the economy will be in a recession within the next 12 months was 36.93%. The individual estimates, of those who responded, ranged from 0% to 100%.  For reference, the average response in August’s survey was 37.04%.

As stated in the article, the survey’s 62 respondents were academic, financial and business economists.  The survey was conducted September 4 – September 8. Not every economist answered every question.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2020:  -4.19%

full-year 2021:  4.00%

full-year 2022:  3.13%

full-year 2023:  2.53%

Unemployment Rate:

December 2020: 8.05%

December 2021: 6.34%

December 2022: 5.20%

December 2023: 4.69%

10-Year Treasury Yield:

December 2020: .77%

December 2021: 1.13%

December 2022: 1.54%

December 2023: 1.89%

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Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of September 10, 2020, titled “The September 2020 Wall Street Journal Economic Forecast Survey

_____

RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” report of August 7, 2020:

from page 23:

(click on charts to enlarge images)

S&P500 earnings trends

from page 24:

S&P500 annual earnings 2010-2021

_____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of August 20, 2020, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

The August 2020 Wall Street Journal Economic Forecast Survey – Notable Aspects

The August 2020 Wall Street Journal Economic Forecast Survey was published on August 13, 2020. The headline is “WSJ Survey: Benefits of Extra Unemployment Aid Outweigh Work Disincentive.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

An excerpt:

Economists surveyed this month saw the economy rebounding 18.3% on an annualized basis in the third quarter, following the 32.9% drop in the second quarter. That was higher than their July forecast of a 15.2% third-quarter bounceback. But economists trimmed their forecasts for the following four quarters, suggesting they see a long recovery ahead.

Roughly 70% percent of economists surveyed said the recovery would look like a “Nike swoosh,” characterized by a sharp drop, followed by a gradual recovery.

As seen in the “Recession Probability” section, the average response as to whether the economy will be in a recession within the next 12 months was 37.04%. The individual estimates, of those who responded, ranged from 0% to 100%.  For reference, the average response in July’s survey was 54.41%.

As stated in the article, the survey’s 62 respondents were academic, financial and business economists.  Not every economist answered every question.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2020:  -5.33%

full-year 2021:  4.39%

full-year 2022:  3.37%

Unemployment Rate:

December 2020: 8.96%

December 2021: 6.63%

December 2022: 5.47%

December 2023: 4.88%

10-Year Treasury Yield:

December 2020: .76%

December 2021: 1.17%

December 2022: 1.58%

____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of August 14, 2020, titled “The August 2020 Wall Street Journal Economic Forecast Survey

_____

RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” report of July 17, 2020:

from page 23:

(click on charts to enlarge images)

S&P500 EPS estimates 2020-2021

from page 24:

S&P500 EPS 2010-2021

_____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of July 24, 2020, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

The July 2020 Wall Street Journal Economic Forecast Survey – Notable Aspects

The July 2020 Wall Street Journal Economic Forecast Survey was published on July 9, 2020. The headline is “WSJ Survey: Strong U.S. Recovery Depends on Effective Covid-19 Response.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

An excerpt:

In the latest survey, 70% of economists said they expect the recovery to resemble a “swoosh” shape similar to the Nike logo, with a large drop followed by a gradual recovery. That was broadly unchanged from the two previous monthly surveys and a contrast to the predictions of Trump administration officials, who have predicted a swift, V-shaped recovery.

As seen in the “Recession Probability” section, the average response as to whether the economy will be in a recession within the next 12 months was 54.41%. The individual estimates, of those who responded, ranged from 0% to 100%.  For reference, the average response in June’s survey was 73.54%.

As stated in the article, the survey’s 60 respondents were academic, financial and business economists.  Not every economist answered every question.  The survey was conducted July 2 – July 7, 2020.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2020:  -5.64%

full-year 2021:  4.70%

full-year 2022:  3.22%

Unemployment Rate:

December 2020: 9.07%

December 2021: 6.75%

December 2022: 5.61%

December 2023: 4.93%

10-Year Treasury Yield:

December 2020: .86%

December 2021: 1.25%

December 2022: 1.68%

____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of July 10, 2020, titled “The July 2020 Wall Street Journal Economic Forecast Survey

_____

RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” report of June 12, 2020:

from page 22:

(click on charts to enlarge images)

trends of S&P500 earnings forecasts

from page 23:

S&P500 EPS 2010-2021

_____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of June 18, 2020, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

The June 2020 Wall Street Journal Economic Forecast Survey – Notable Aspects

The June 2020 Wall Street Journal Economic Forecast Survey was published on June 11, 2020. The headline is “WSJ Survey: U.S. Recovery From Pandemic Shock to Begin by Third Quarter.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

An excerpt:

The U.S. economy will be in recovery by the third quarter of this year, economists said in a survey that also concluded the labor market will fare better than previously expected following the effects of the coronavirus pandemic.

A monthly Wall Street Journal survey found that more than two-thirds of economists, 68.4%, expect the economic recovery to start in the third quarter. Just over a fifth, 22.8%, said it already began in the current, second quarter. The U.S. entered a recession in February, the National Bureau of Economic Research determined this week.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 73.54%. The individual estimates, of those who responded, ranged from 0% to 100%.  For reference, the average response in May’s survey was 94.6%.

As stated in the article, the survey’s 62 respondents were academic, financial and business economists.  Not every economist answered every question.  The survey was conducted June 5 – June 9, 2020.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2020:  -5.87%

full-year 2021:  4.70%

full-year 2022:  3.09%

Unemployment Rate:

December 2020: 9.64%

December 2021: 6.95%

December 2022: 5.69%

December 2023: 4.97%

10-Year Treasury Yield:

December 2020: .97%

December 2021: 1.38%

December 2022: 1.80%

____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of June 12, 2020, titled “The June 2020 Wall Street Journal Economic Forecast Survey

_____

RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

“CFO Signals” Report – Excerpts

Recently Deloitte released their “CFO Signals” “High-Level Summary” report for the 2nd Quarter of 2020.

As seen in page 3 of the report, there were 147 survey respondents.  As stated:

“Each quarter (since 2Q10), CFO Signals has tracked the thinking and actions of CFOs representing many of North America’s largest and most influential companies.

All respondents are CFOs from the US, Canada, and Mexico, and the vast majority are from companies with more than $1 billion in annual revenue. For a summary of this quarter’s response demographics, please see the sidebars and charts on this page. For other information about participation and methodology, please contact [email protected]

Here are some of the excerpts that I found notable:

from page 5:

Findings at a glance

Perceptions

How do you regard the status of the North American, European, and Chinese economies? Perceptions of North America fell drastically, with just 1% of CFOs rating current conditions as good (80% last quarter), but 58% expecting better conditions in a year (up from 35%). Europe’s numbers were also down sharply, coming in at 1% and 33%. Perceptions of China’s current conditions held at 9%, and expectations for a year from now rose sharply to 51%. Page 7.

What is your perception of the capital markets? Sixty-three percent of CFOs say debt financing is attractive (down from 90%) following major drawdowns on credit facilities. Equity financing is considered attractive by 25% (down from 46%) of public company CFOs and 13% (down from 37%) of private company CFOs. Fifty-five percent still say US equity markets are overvalued (down from 83%) despite very sharp market declines. Page 8.

Sentiment

Compared to three months ago, how do you feel about the financial prospects for your company? The net optimism index fell drastically from last quarter’s +24 to an historic survey low of -54. Just 11% of CFOs expressed rising optimism (38% last quarter), and 65% (a historic survey high) expressed declining optimism (14% last quarter). Page 9.

Expectations

What is your company’s business focus for the next year? Companies shifted toward their first collective cost reduction (over revenue growth) focus in survey history, and they doubled down on current geographies (over new ones) and organic growth. Page 10.

How will your key operating metrics change over the next 12 months? YOY growth expectations fell drastically, with each metric hitting a new low and turning negative for the first time in survey history. Revenue growth slid from 3.9% to -8.6%; earnings growth fell from 6.0% to -18.7%. Capital spending slid sharply from an already-low 2.3% to -12.3%. Domestic hiring fell from 1.2% to -6.0%, and dividend growth slid from 3.7% to -4.8%. Page 11.

from page 10:

Expectations

Business focus for next year

Companies shifted toward their first collective cost reduction (over revenue growth) focus in survey history, and they doubled down on current geographies (over new ones) and organic growth.

For the first time in survey history, CFOs indicated a net focus on cost reduction over revenue growth (43% vs. 32%, for a net of -11%). The bias toward investing cash over returning it accelerated (62% vs. 8%, for a net of +54%).

The focus on current offerings over new ones continued to rise (47% vs. 31%, for a net of -16%), with the highest current offering biases in the last four years. The recent focus on current geographies over new ones accelerated markedly (86% vs. 4%, for a net of -82%), with by far the highest focus on current geographies in seven years.

The bias toward organic over inorganic growth rose to its highest level in seven years (70% vs. 7%, for a net of -63%).

Please see the full report for industry-specific charts.

from page 11:

Expectations

Growth in key metrics, year-over-year

All growth expectations declined drastically, and turned negative for the first time in survey history.

Revenue growth fell sharply from 3.9% to -8.6%—negative for the first time, and by far the lowest in survey history. The US, Canada, and Mexico all hit new lows by wide margins. Healthcare/Pharma and Technology are positive  and lead from an industry standpoint; Retail/ Wholesale and Services trail by a wide margin.

Earnings growth fell drastically from 6.0% to -18.7%—a new low by a wide margin, and a very sharp decline even among the other metrics’ strong declines this quarter. The US, Canada, and Mexico all hit new lows by wide margins. Only Technology is above zero; Retail/Wholesale and Services are by far the lowest.

Capital spending growth slid sharply from 2.3% to -12.3%, by far a new survey low, and the first-ever negative reading. The US and Mexico hit new lows by wide margins; Canada was better, but still negative. Only Healthcare/Pharma is above zero; Retail/Wholesale is lowest by a wide margin.

Domestic hiring growth fell markedly from 1.2% to -6.0%, another new survey low. The US and Mexico hit new lows by wide margins; Canada was the only country with positive growth. All industries are negative; Retail/Wholesale is lowest by far.

Dividend growth slid from 3.7% to -4.8%, the lowest-ever level and first-ever negative reading.

Please see the full report for industry-specific charts.

Among the various charts and graphics in the report are graphics depicting trends in “Own Company Optimism” on page 9 and “Economic Optimism” found on page 7.

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RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC (revsd.com) is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” report of May 15, 2020:

from page 22:

(click on charts to enlarge images)

S&P500 earnings trends

from page 24:

S&P500 EPS 2010-2021

_____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of May 18, 2020, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.