Category Archives: forecasting

Fall 2021 Snapshot of Expected Future S&P 500 Earnings

Every three months, we take a snapshot of the expectations for future earnings in the S&P 500 (Index: SPX) at approximately the midpoint of the current quarter, shortly after most U.S. firms have announced their previous quarter's earnings.

Since our last update three months ago, Standard and Poor has updated their projections to indicate stronger earnings growth going into 2022.

Forecasts for S&P 500 Trailing Twelve Month Earnings per Share, December 2017-December 2022, Snapshot on 11 November 2021

S&P is also forecasting slower earnings growth during 2022.

Reference

Silverblatt, Howard. Standard & Poor. S&P 500 Earnings and Estimates. [Excel Spreadsheet]. 11 November 2021. Accessed 12 November 2021.

Summer 2021 Snapshot of S&P 500 Quarterly Dividend Futures

This is the third and final snapshot in time we're presenting for the S&P 500 (Index: SPX) in the summer of 2021, this time focusing on the expectations for future quarterly dividends.

The following chart documents past quarterly dividend futures for the S&P 500 from 2020-Q3 through 2021-Q2 and shows the projected expectations for the index' future dividends per share from 2021-Q3 through 2022-Q3:

Past and Projected S&P 500 Quarterly Dividends per Share, 2020-Q3 through 2022-Q3

Sharp eyed readers will note that dividend futures do not follow calendar quarters, which makes them different from the figures reported by Standard and Poor for the index. Instead, they follow the terms of dividend futures contracts, which run from the end of the third Friday of the month ending the preceding quarter through the third Friday of the month ending the indicated quarter.

Reference

CME Group. S&P 500 Quarterly Dividend Index Futures. [Online Database]. Accessed 20 August 2021.

Winter 2021 Snapshot of Expected Future S&P 500 Earnings

Every three months, we take a snapshot of the expectations for future earnings in the S&P 500 (Index: SPX) at approximately the midpoint of the current quarter, shortly after most U.S. firms have announced their previous quarter's earnings.

The latest forecast for S&P 500 earnings in the first quarter of 2021 suggests a stronger rebound for earnings than the forecast from the Fall 2020 snapshot.

The chart shows two previous earnings recessions for the S&P 500, going back to 2014. It also indicates that 2020-Q4 marks the bottom of the coronavirus earnings recession, which looks like it will extend into the third quarter of 2021 before the S&P 500's earnings per share recover to their pre-coronavirus recession level.

Reference

Silverblatt, Howard. Standard & Poor. S&P 500 Earnings and Estimates. [Excel Spreadsheet]. 11 February 2021. Accessed 12 February 2021. (As a bonus feature, if you follow the link to the spreadsheet before his next update, you'll find Howard's photo of New York City's 34th St. after a 17-inch snowfall in early February 2021 embedded within it!)

The Future for S&P 500 Dividends in 2021

From time to time, we like to present a snapshot of what the future for the S&P 500's quarterly dividends per share looks like. Here is what investors were expecting as of the close of trading on Friday, 15 January 2021, just ahead of the presidential transition in the United States.

Past and Projected Quarterly Dividends Futures for the S&P 500, 2019-Q4 through 2021-Q4, Snapshot on  15 January 2021

As the Operation Warp Speed rollout of the SARS-CoV-2 coronavirus vaccines continues, and as several state and local governments come to recognize their lockdown policies are not beneficial, we would anticipate the projections of future quarterly dividends will increase as the business outlook improves. But we'll see what happens as the year progresses!

References

CME Group. S&P 500 Quarterly Dividend Index Futures. [Online database]. Accessed 15 January 2021.

Note

The CME Group's S&P 500 dividend futures are based on futures contracts that cover the period of time through the third Friday of the month ending their indicated quarter, when they expire. By contrast, Standard & Poor reports the amount of dividends paid out per share over the course of a calendar quarter, which is why these two sources often indicate different values.

Fall 2020 Snapshot of Expected Future S&P 500 Earnings

Every three months, we take a snapshot of the expectations for future earnings in the S&P 500 (Index: SPX) at approximately the midpoint of the current quarter, shortly after most U.S. firms have announced their previous quarter's earnings.

The latest forecast for S&P 500 earnings through the end of 2020 suggests a less deep earnings recession than the forecast from the Summer 2020 snapshot, indicated a better-than-previously-expected bottom for the Coronavirus Recession. At the same time, S&P continues to project a robust recovery for earnings in 2021, although not as strong as it did three months ago.

Forecasts for S&P 500 Trailing Twelve Month Earnings per Share, September 2014-December 2021, Snapshot on 12 November 2020

The chart shows two previous earnings recessions for the S&P 500, going back to 2014. As you can see from the historic earnings per share data shown in the chart, Standard & Poor has a history of making optimistic projections, which are often revised downward. Changes in S&P's projections for 2021 will be something to watch as we get into 2021, especially with the prospects for a global double-dip recession.

Data Source

Silverblatt, Howard. Standard & Poor. S&P 500 Earnings and Estimates. [Excel Spreadsheet]. 12 November 2020. Accessed 19 November 2020.