The US economy continues to decelerate. The Fed is behind the curve on the easing adjustments. The Rest of the world is setting up to recover. This means is the Dollar will getweaker over the last half of the year.
Happy Monday. Good Luck out there this week.
Earnings
Source I/B/E/S data from Refinitiv
Aggregate Estimates and Revisions
- Second quarter earnings are expected to increase 1.0% from 18Q2. Excluding the energy sector, the earnings growth estimate is 1.6%.
- Of the 79 companies in the S&P 500 that have reported earnings to date for 19Q2, 77.2% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four quarter average of 76%.
- 19Q2 revenue is expected to increase 3.4% from 18Q2. Excluding the energy sector, the growth estimate is 4.0%.
- 64.6% of companies have reported 19Q2 revenue above analyst expectations. This compares to a long-term average of 60% and an average over the past four quarters of 63%.
- For 19Q2, there have been 87 negative EPS preannouncements issued by S&P 500 corporations compared to 23 positive, which results in an N/P ratio of 3.8 for the S&P 500 Index.
- The forward four-quarter (19Q3 –20Q2) P/E ratio for the S&P 500 is 17.2.
- During the week of July. 22, 145 S&P 500 companies are expected to report quarterly earnings.
If you find this post helpful, please pass along to the investment community. If you would like to see any additional information, drop us a line and let us know.
Global Spotlight
The Deterrence Dilemma With Iran. After vowing repeatedly to retaliate against the United Kingdom for impounding a Syria-bound Iranian oil tanker off the coast of Gibraltar, Iran seized two British tankers on July 19 and released one of them, the Mesdar, after reportedly delivering a warning to the crew on environmental regulations.
Brexit, the Boris Way? Former British Foreign Secretary Boris Johnson is expected to win the Conservative Party’s leadership contest July 23, and as the United Kingdom’s next prime minister, he is committed to delivering Brexit at any cost.
Japan’s Postelection To-Do List. Japan’s upper-house elections take place on July 21 and are expected to deliver a win to the ruling Liberal Democratic Party. If Japanese Prime Minister Shinzo Abe manages to secure a two-thirds majority, that will help ensure forward movement on some big pending reforms, including a 2 percent consumption tax hike expected in October and a constitutional reform to expand the role of Japan’s Self-Defense Forces.
Italy’s Leaders Contemplate Elections. As we wrote in our 2019 Third-Quarter Forecast, Italy reached an agreement with Brussels to avoid sanctions from the European Commission, but that would not be enough to tame deep frictions between Italy’s governing parties, the right-wing League and the populist Five Star Movement.
Mexico’s Progress Report on the Border. July 22 marks the first checkpoint of the U.S.-Mexico deal on curbing illegal migration. Mexico is hoping that a nearly 29 percent drop in U.S. border apprehensions between May and June will help convince the White House that Mexico’s security measures are having the desired effect and will thus justify putting the tariff threat to bed.
Erdogan Is Getting His Rate Cut. A cut to Turkey’s key interest rate — currently at 24 percent — is widely expected when Turkey’s central bank’s monetary policy committee convenes on July 25. President Recep Tayyip Erdogan’s distaste for high interest rates led to the recent firing of the central bank’s governor and his replacement by a more compliant deputy, who is expected to embrace a cut, even if it leads to more downward pressure on the Turkish lira.
Ukraine Goes to the Polls. Ukrainians will head to the polls on July 21 for parliamentary elections that are likely to be dominated by the Servant of the People party of President Volodymyr Zelenskiy, who rose to a sweeping victory in presidential elections just three months ago.
Anti-Corruption Comes Back to Bite Ramaphosa. South African President Cyril Ramaphosa was dealt a blow this week when the country’s public protector accused him of violating the constitution and ethics code related to a 2017 campaign donation.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S. releases.
Briefing.com
Last Weeks Numbers
Review Last weeks numbers here.
