The busiest week of the 18Q1 earnings season saw a storm of earnings reports from 180 S&P 500 companies. Quarterly earnings are now expected to increase 24.6% from the prior year, up 4.4 percentage points from the April 20 estimate of 18.3%. Among the positive results, concerns of inflationary impacts on gross margin and the topic of peak earnings arose. Exhibit 1: S&P 500 Quarterly Bottom Up EPS Peak earnings debate Year-on-year (YoY) earnings are expected to peak in 18Q1; however, analysts do not expect to see peak earnings in the foreseeable future. Exhibit 2: S&P 500 Average Gross Margins