Healthy Earnings – For Now

Professional investors are constantly trying to figure out whether the U.S. economy is healthy or sliding toward a recession.  The most important tea leaves they read are actual corporate earnings vs. the earnings estimates provided by Wall Street analysts.  Surprises on the upside are generally considered to be positive signs, while earnings below what analysts expected are potentially warning us that the economy is growing sickly.

The results of 2017 are giving them an upbeat signal.  The percentage of public companies that have beaten their consensus earnings reached 71.6%.   To put that in perspective, any reading above 70% is considered strong relative to past earnings seasons.  But as you can see from the chart, not every corporate sector shared equally in the upside.  Companies in the industrials, technology, healthcare and consumer staples sectors appear to be robust, while the news is not as good for telecom, energy, utilities and real estate companies. 

For most of us, this is nothing more than interesting news, since the most successful investors regard attempts to time the market to be a fool’s game.  But there may be some comfort in having reason to believe that the next recession is not right around the corner, and that the investment climate still seems to be relatively sunny.

Stay Diversified, Stay Your Course!

Empyrion Wealth Management (“Empyrion”) is an investment advisor registered with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940. Information pertaining to Empyrion’s advisory operations, services and fees is set forth in Empyrion’s current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Empyrion. The information contained in any third-party resource cited herein is not owned or controlled by Empyrion, and Empyrion does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Empyrion of the third party or any of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner or investment advisor.

Sign Up for Media Updates