All About Earnings & Inflation

Check out the accompanying pdf and chart collection. Executive Summary: Like the economy, earnings have been landing softly; revenues haven’t landed at all. The S&P 500’s Q1 results imply earnings weakness totally due to margin contraction as businesses battled fast rising costs. … Analysts see y/y earnings gains resuming in Q3 and Q4, for full-year earnings growth of 0.4% followed by 11.4% next year. … We see a U-shaped earnings recovery and are tweaking our estimates for S&P 500 revenues, earnings, margins, and the price index. Our year-end targets for the S&P 500 are 4600 this year and 5200 next. … Inflation continues to moderate nicely, which should stay the Fed’s hand.