It was another great quarter for corporate America.
Aggregate S&P 500 year-over-year sales and earnings growth for the fourth quarter came in at 7.8% and 14.4% respectively. Our favorite sector, Technology, reported 22.9% earnings growth over the same period. In the third quarter, the Information Technology sector recorded earnings beat of 10.8% versus the historical average of 4%.
"It's probable that by the time you get to 3Q of 2018, you’re going to have an earnings slowdown in rate of change terms in one of the fastest growing areas of the market and the sector that we’ve liked best, Technology,” McCullough says.
Why?
Earnings growth is recorded on year-over-year basis and, simply put, last year’s numbers were so good, they’re going to be a lot tougher to beat by such a wide margin, particularly in the third quarter. The “comp” against which Technology earnings have to beat in 3Q 2018 is 23.7% year-over-year growth.
In other words, this is probably as good as it gets.
Want to learn more about the other two market risks (besides tough(er) earnings comps) that could crack this bull market? Here you go...
[WEBCAST] MCCULLOUGH: 3 MARKET RISKS I’M WATCHING CLOSELY
It’s been 9 years since this big bull market began.
The S&P 500 is up 305% since the March 2009 bottom—15% in the past year alone.
Our favorite pick over the past year (Technology) is up over 25% alone.
It won’t go on forever.
A number of imminent catalysts could crack this market.
Join Hedgeye CEO Keith McCullough for the no-punches-pulled, investing webcast above…
Keith discussed our evolving outlook for U.S. stocks, economy, corporate earnings, inflation and more.
Watch the replay above.
