The article titled “S&P 500 Earnings Still Solid” provides an overview of the current state of S&P 500 earnings and the 10-year Treasury yield. The author highlights that the 10-year Treasury yield has reached its highest level since late November 2023, which may potentially impact the stability of the S&P 500. However, despite this increase, the forward 4-quarter estimate for S&P 500 earnings has continued to improve for the fifth consecutive week. Additionally, the article mentions the upcoming earnings reports of companies such as Micron Technology, Nike, and FedEx, which are expected to provide further insights into the economic landscape. Overall, the article emphasizes that while there may be some fluctuations in the market, S&P 500 earnings remain solid.
Weekly Close of the 10-Year US Treasury Yield
Highest Yield Since Late November ’23
In the latest update, the weekly close of the 10-Year US Treasury Yield reached its highest level since late November 2023. The final yield print for the week stood at 4.30%, surpassing the 4.47% close from the previous November. This increase in the Treasury yield suggests a potential impact on the S&P 500 and other financial markets. Investors should keep a close eye on the yield movement in order to gauge its effect on the market.
Improvement in Forward 4-Quarter Estimate (FFQE)
Sequential Improvement in FFQE for 5th Week in a Row
The forward 4-quarter estimate (FFQE) showed signs of improvement for the fifth consecutive week. The FFQE for this week reached $243.31, an improvement from the previous week’s $243.29. This sequential improvement is a positive sign for the market, indicating a potential upward trend in earnings estimates. Investors can take this improvement into account when making investment decisions.
Improvement in S&P 500 Earnings Yield
First Sequential Improvement Since Mid-February ’24
The S&P 500 earnings yield saw a notable improvement this week, marking the first sequential improvement since mid-February 2024. The earnings yield increased from 4.75% to 4.76%, suggesting a positive trend in S&P 500 earnings. This improvement is significant as it indicates a potential shift in the market’s performance. Investors should consider this improvement when evaluating investment opportunities.
Impact of 10-Year Treasury Yield on S&P 500
The rise in the 10-Year Treasury Yield can have a significant impact on the S&P 500 and other financial markets. Higher Treasury yields can make fixed-income investments more attractive, potentially leading investors to shift their funds out of equities and into bonds. This shift in investor sentiment can impact stock prices and overall market performance. It is important for investors to monitor the yield movement and adjust their investment strategies accordingly.
Dollar Performance and Yield Impact
The recent increase in the 10-Year Treasury Yield has also had an impact on the performance of the dollar. As measured by the UUP, the dollar experienced a strong week, with a 0.75% increase in the last five trading days. This increase in the dollar’s value can be attributed to the higher yields, which make dollar-denominated assets more appealing to investors. The performance of the dollar should be taken into consideration when analyzing the market’s response to changes in yields.
Credit Spread Progression since S&P 500 Bottom in Early November ’23
Tightening of High-Yield Credit Spreads
Credit spreads have shown significant progression since the S&P 500 bottomed out in early November 2023. This past week, high-yield credit spreads tightened by 12 basis points in just five days. The tightening of credit spreads is generally seen as positive for the market, indicating improved credit conditions. Investors should monitor credit spread trends as they can provide insights into market sentiment and potential investment opportunities.
S&P 500 Data: FFQE and P/E Ratio
The S&P 500’s forward 4-quarter estimate (FFQE) showed continued improvement, reaching $243.31 this week. This marks the fifth consecutive week of sequential improvement in the FFQE. Additionally, the price-to-earnings (P/E) ratio on the forward estimate remained steady at 21x. These figures indicate positive sentiment towards S&P 500 earnings and suggest potential opportunities for investors.
Upcoming Earnings Reports for Micron Technology, Nike, and FedEx
Next week, investors should pay attention to the earnings reports from Micron Technology (MU), Nike (NKE), and FedEx (FDX). These companies, with their considerable global reach, can provide valuable insights into their respective industries and the overall market. Analysts will closely watch these reports for potential indicators of market trends and investment opportunities.
Quiet Period for S&P 500 Earnings
Little Expected Change in Results
Positive Outlook for 2024 EPS Estimates
With just two weeks left in Q4 2023 S&P 500 earnings, the market has entered a quiet period or dead zone, with little expected change in the results. Analysts typically reduce numbers during this period, but positive news awaits. The 2024 S&P 500 earnings per share (EPS) estimates have remained relatively stable over the past several weeks, indicating confidence in the market’s future performance. This positive outlook for 2024 EPS estimates brings a sense of optimism to investors.
Summary and Conclusion
Impact of Boeing’s Issues on FedEx
In summary, the 10-Year US Treasury Yield has reached its highest level since late November 2023, potentially impacting the S&P 500 and other financial markets. The market has seen sequential improvements in the forward 4-quarter estimate (FFQE) for the past five weeks, indicating positive sentiment towards earnings. The recent improvement in the S&P 500 earnings yield suggests a potential shift in market performance. The rise in Treasury yields has also influenced the dollar’s performance, making dollar-denominated assets more attractive. Credit spreads have tightened, indicating improved credit conditions. The upcoming earnings reports for Micron Technology, Nike, and FedEx will be closely monitored for insights into market trends. Overall, while there is a quiet period for S&P 500 earnings, there is a positive outlook for 2024 EPS estimates. Investors should be aware of the potential impact of Boeing’s issues on FedEx and adjust their investment strategies accordingly.
