Source: Refinitiv
The above is an excerpt from Refinitiv’s weekly earnings report.
The bit that investors need to keep an eye on is the earnings growth rate for the next four quarters.
The next set of earnings reports should show S&P 500 companies grew earnings per share 15.1% in Q4 2018 (look for the number to end up higher as the real numbers come through).
But you can see the Q1, Q2 and Q3 numbers for 2019 are expected to fall back into the single digits, partly a function of earnings cycling the corporate tax cuts last year, as mentioned here previously.
Some strategists estimated the tax cuts added around eight percentage points to 2018 earnings growth so it shouldn’t be a surprise that growth is harder to come by this year. But that has nothing to do with the companies doing it tougher or the economy going into recession. That, folks, is just math.