Stock Market & Economy Recap - Saturday, May 1

The earnings per share (EPS) for all S&P 500 companies combined increased to $187.50 this week. There was a gain of +1.35% for the week and +18% year-to-date.

60% of S&P 500 companies have now reported Q1 results. 87% of companies have beaten earnings expectations, and earnings have come in +22.8% above estimates. Q1 earnings growth is now +46.3%, and full year 2021 earnings growth projections have increased to +32.3%. Also 78% of companies have beaten revenue estimates.

The S&P 500 gained +0.02% for the week.

The increase in the EPS (+1.35%) was more than the increase in price (+0.02%), making the valuation a bit more attractive. The price to earnings (PE) ratio is now at 22.3.

The S&P 500 earnings yield is now 4.48% compared to the 10-year treasury bond rate – which increased to 1.63%. The equity risk premium is now 2.85%. Stocks are still reasonably valued compared to fixed income alternatives.

Economic Data Review

The Conference Board’s consumer confidence index came in at 121.7 for April -- a gain of 11.7% over last month (which was revised down, from 109.7 to 109.0), and an increase of 42% year-over-year. According to the report:

“Consumers’ assessment of current conditions improved significantly in April, suggesting the economic recovery strengthened further in early Q2. Consumers’ optimism about the short-term outlook held steady this month. Consumers were more upbeat about their income prospects, perhaps due to the improving job market and the recent round of stimulus checks. Short-term inflation expectations held steady in April, but remain elevated.”

Consumers appraisal of current conditions increased +27% for the month. The consumer confidence index has now recovered 72% of the COVID-19 decline, but remains 10.4% below all-time highs.

We got our first look at Q1 GDP this week. Real GDP grew 6.4% on an annualized basis in Q1, now at $19.08 trillion. The economy has now recovered 91.5% of the COVID-19 recession, and is likely to make a new record high in Q2. According to the report:

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Note: I/B/E/S data from Refinitiv.

Disclaimer: None.

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