Saturday, July 6, 2013

S&P Companies Issued a Record Number of Negative Earnings Preannouncements for Q2 (Factset Chart) - PART II

Here's more bullish news for the perma anti-permabears out there. According to Factset on 6/28/2013, the number of negative earnings preannouncements (or negative EPS guidance) issued by S&P companies for Q2 hit a record high. It's funny because the number of negative preannouncements has been rising in tandem with the S&P 500 since the Fed's QE2 program began in 2010 (there was a slight blip in Q1 2012). I wrote about this first in October 2012, and if you look at Factset's chart below, it's been happening since Q4 2012 as well. But will the Federal Reserve (FOMC) finally ruin this relationship if they decide to "moderate the monthly pace" of asset purchases (QE) at their next few meetings?

According to Factset (emphasis mine),

For Q2 2013, 87 companies have issued negative EPS guidance while 21 companies have issued positive EPS guidance. If 87 is the final number of companies issuing negative EPS guidance for the quarter, it will mark the highest number of companies issuing negative EPS guidance since FactSet began tracking guidance data in 2006. The current record is 86, which was recorded in Q1 2013. If 21 is the final number of companies issuing positive EPS guidance, it will mark the lowest number of companies issuing negative EPS guidance for a quarter. The current record is 25, which was also recorded in Q1 2013.

Here's the chart from the Factset Guidance report.

Source: Factset

Part I: S&P Has Been Rising With Negative Earnings Pre-announcements Since QE2 (Two Years Straight)

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