{"id":89437,"date":"2024-01-26T19:28:15","date_gmt":"2024-01-27T00:28:15","guid":{"rendered":"https:\/\/ifintechworld.com\/?p=89437"},"modified":"2024-01-26T19:28:16","modified_gmt":"2024-01-27T00:28:16","slug":"sp-500-earnings-5-of-the-top-10-mega-caps-report-next-week","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=89437","title":{"rendered":"S&#038;P 500 Earnings: 5 Of The Top 10 Mega Caps Report Next Week"},"content":{"rendered":"<div data-test-id=\"content-container\">\n<p><figure class=\"getty-figure\" data-type=\"getty-image\"><picture>  <\/picture><figcaption> <\/figcaption><\/figure>\n<\/p>\n<p>Earlier this week, the LSEG put up their quarterly earnings preview, and included within was the \u201cmarket cap weight vs. sector weight\u201d analysis of the 11 S&amp;P 500 sectors. (The table was posted here last week. The full article<span class=\"paywall-full-content invisible\"> is attached here.)<\/span><\/p>\n<p class=\"paywall-full-content invisible\">Tajinder Dhillon, the LSEG executive who\u2019s responsible for prepping and publishing the Russell 2000 and S&amp;P 500 earnings reports each week, sent the earnings weights of the top 10 names in the S&amp;P 500 last week, so those earnings weights could be compared to their respective market cap weights:<\/p>\n<p class=\"paywall-full-content invisible\"><img decoding=\"async\" src=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2024\/01\/saupload_SP500earningsweighttop10names12624.png\" alt=\"earnings weights of the top 10 names in the S&amp;P 500\" loading=\"lazy\"><\/p>\n<p class=\"paywall-full-content invisible\">5 of the top 10 S&amp;P 500 mega-cap names report this coming week.<\/p>\n<ul class=\"paywall-full-content invisible\">\n<li> <em><strong>Apple (AAPL):<\/strong><\/em> Market cap weight 6.29% vs. its earnings weight of 6.7%<\/li>\n<li> <em><strong>Microsoft (MSFT):<\/strong><\/em> Market cap weight of 7.29% versus its earnings weight of 4.5%<\/li>\n<li> <em><strong>Meta (META):<\/strong><\/em> Market cap weight of<span class=\"paywall-full-content no-summary-bullets invisible\"> 2.11%, vs its earnings weight of 2.4%<\/span> <\/li>\n<li class=\"paywall-full-content no-summary-bullets invisible\"> <em><strong>Alphabet (GOOG) (GOOGL):<\/strong><\/em> Market cap weight of 2.14%, vs its earnings weight of 2.1%<\/li>\n<li class=\"paywall-full-content no-summary-bullets invisible\"> <em><strong>Amazon (AMZN):<\/strong><\/em> Market cap weight of 3.48%, vs its earnings weight of 1.6%<\/li>\n<\/ul>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Apple, Meta and Amazon report after the closing bell on February 1 \u201924, while Microsoft and Alphabet report after the closing bell on Tuesday, January 30, \u201924.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The whole point of this is to give readers the perspective of how the two \u201cweights\u201d relate.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Back in the late 1990s, the argument against the technology sector in the S&amp;P 500, i.e. Intel (INTC), Microsoft, Cisco (CSCO), SunMicro, etc. was that with a market cap weight of 35%, the earnings weight of the technology sector was just 13-14%.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">A bullish or bearish argument isn\u2019t being bad based solely on this ratio, but readers can tell the ratio is far more \u201creasonable\u201d today. Of the 5 names listed above, Apple\u2019s earnings weight is larger than its market cap weight, (which is truly surprising) while (also surprising), the same can be said for META.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Only Amazon\u2019s market cap is more than 2x greater than its earnings weight today. (The market cap weight is sourced from Morningstar and final market prices for the SPY portfolio as of 1\/25\/24.)<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">It\u2019s normal for the financial sector to have an earnings weight greater than its market cap, and that\u2019s true for Berkshire Hathaway (BRK.A) (BRK.B). JPMorgan (JPM), is actually ranked 12th in the SPY by market cap, but 7th by earnings weight.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">This blog will be out with an earnings preview on a number of the above names this weekend.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><em><strong>S&amp;P 500 data:<\/strong><\/em><\/p>\n<ul class=\"paywall-full-content invisible no-summary-bullets\">\n<li>The forward 4-quarter estimate (FFQE) fell $0.31 to $242.61 from last week\u2019s $242.92 and Sept 30th\u2019s $232.95.<\/li>\n<li>The P\/E ratio has increased to 20.2x, the first time since 12\/15\/23 that the S&amp;P 500\u2019s P\/E ratio is above 20x.<\/li>\n<li>If the S&amp;P 500 closes today at 4,888, the S&amp;P 500 earnings yield will have dropped below 5% to 4.96%, its lowest close since late December \u201923.<\/li>\n<li>The 2023 full year calendar EPS estimate for the S&amp;P 500 increased last week to $219.53 vs. the prior week&#8217;s $219.40.<\/li>\n<li>The S&amp;P 500 EPS \u201cupside surprise\u201d jumped to +4.2% from last week\u2019s +3.6%, while the revenue upside surprise remains around 1%.<\/li>\n<li>The 2024 EPS estimate declined this week, possibly due to cautious guidance for calendar \u201924, from $243.17 to $242.61 and Sept 30th\u2019s estimate of $247.49.<\/li>\n<\/ul>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><em><strong>Summary\/conclusion: <\/strong><\/em>Earnings weight matters to the S&amp;P 500, and this coming week. 18.3% of the S&amp;P 500\u2019s (only 5 stocks) earnings weight reports in just three days \u2013 Tuesday through Thursday. Again, earnings previews for some of the top 10 names will be out this weekend on this blog.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The increase in the S&amp;P 500\u2019s upside surprise this week is a good tell, but guidance matters more. It\u2019s understandable that managements are being cautious \u2013 just look at how many of Wall Street\u2019s best have called for a recession the last 24 months.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">IBES data and Refinitiv, have undergone a corporate name change with the start of 2024, hence &#8211; although the data will be from the exact same source \u2013 the new name for Refinitiv will be known as LSEG (London Stock Exchange Group) and will be referred to as LSEG going forward.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">None of this is advice or a recommendation. Past performance is no guarantee or suggestion of future results. All S&amp;P 500 earnings data is sourced from LSEG unless otherwise noted.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Capital markets can change quickly for both the good and the bad. Readers should gauge their comfort with their portfolio volatility accordingly, and adjust when necessary.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Thanks for reading.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><em>Original Post<\/em><\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><strong>Editor&#8217;s Note:<\/strong> The summary bullets for this article were chosen by Seeking Alpha editors.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/seekingalpha.com\/article\/4665427-s-and-p-500-earnings-5-of-top-10-mega-caps-report-next-week?source=feed_all_articles\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Earlier this week, the LSEG put up their quarterly earnings preview, and included within was the \u201cmarket cap weight vs. sector weight\u201d analysis of the 11 S&amp;P 500 sectors. (The table was posted here last week. The full article is attached here.) Tajinder Dhillon, the LSEG executive who\u2019s responsible for prepping and publishing the Russell [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":38636,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[236],"tags":[83],"class_list":["post-89437","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-news","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>S&amp;P 500 Earnings: 5 Of The Top 10 Mega Caps Report Next Week | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Earlier this week, the LSEG put up their quarterly earnings preview, and included within was the \u201cmarket cap weight vs. sector weight\u201d analysis of the 11\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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