Tuesday, February 24, 2015

US Revenues: Running Out of Energy (excerpt)

In the Quant Center of our website, we update, on a weekly basis, tables showing analysts’ consensus expectations for annual revenues growth rates. As of February 12, here is the performance derby for S&P 500 revenues growth rates this year for the sectors: IT (7.3%), Health Care (6.2), Consumer Discretionary (4.7), Consumer Staples (4.0), Telecom Services (2.9), Financials (2.4), Industrials (1.9), Utilities (1.2), S&P 500 (-0.2), Materials (-1.0), and Energy (-24.3). Clearly, Energy is a huge drag on revenues.

The y/y growth rate of S&P 500 revenues is highly correlated with the comparable growth rate of manufacturing and trade sales. The former was up 4.9% during Q3, while the latter was up only 0.9% during December. Excluding petroleum products, business sales rose 5.5% y/y during December

Today's Morning Briefing: More Fairy Dust? (1) Something in common with Yellen. (2) Shades of grey. (3) “Patient” may still be the word after first rate hike. (4) “Patient” is the new “measured.” (5) Will Fed's report update valuation view? (6) Hilsenrath’s take. (7) Earnings erosion may be spreading beyond Energy. (8) Is a P/E of 19.0 irrationally exuberant? (9) Energy is weighing down revenues growth for S&P 500. (More for subscribers.)

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