In 2021, we expect to see a year of high expectations for earnings growth as we exit 2020, which saw growth rates plummet during the first three quarters to levels not seen since the 2008 crisis. The earnings growth forecast for 2021 is currently 25.9%, the highest since 2010. In a typical quarter, year-over-year (YoY) growth expectations decline by an average of 3.5 percentage points (ppts) from the start of the quarter to the start of earnings season. Seeing an increase in growth expectations heading into earnings season is fairly uncommon, but we have seen exactly this behavior for the

Banks unofficially kicked off 19Q3 S&P 500 earnings season.  The ‘big six’ finished reporting earnings (JPMorgan, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, Morgan Stanley).  As a group, earnings growth rate declined 0.7% YoY, while revenue growth increased 2.3%. Exhibit 1: Earnings and Revenue growth forecasts Goldman Sachs led the decline with earnings and revenue growth of -23.7% and -3.7% respectively.  Investment Banking revenues were down 15% YoY, while Financial Advisory revenues were down 22% YoY, but sentiment on future M&A activity was positive, particularly in health care and natural resources.  “The operating environment in the third quarter remained

Earnings season for the third quarter of 2019 is around the corner. The S&P 500 is expected to see the first year-on-year (YoY) decline since 2016 and investors’ attention will soon turn to the banks industry. The group is the first to report earnings, marking the unofficial start to earnings season. Heading into the reporting period, a trend has emerged among the banks; analysts have become more bearish and have consistently made downward revisions to estimates. Exhibit 1: S&P 500 19Q3 YoY Earnings and Revenue Analysts are cutting Q3 2019 earnings estimates ahead of earnings season. YoY revenue growth expectations

The second quarter of 2019’s earnings season kicked off with a flood of bank earnings reports. Fourteen of the 19 companies within the S&P 500’s bank industry have reported 19Q2 earnings and revenue. While the majority of companies within the industry beat top and bottom line expectations, they fell short on some industry key performance indicators (KPI’s). Exhibit 1: S&P 500 Bank Industry YoY Growth Rates The S&P 500 bank industry is expected to see 19Q2 YoY revenue increase 2.9% and earnings increase 18.4%. Of the companies that reported, 78.6% beat revenue estimates, which came in 1.7% above expectations. The

Third quarter earnings are expected to increase 1% from Q3 2015.