CHART OF THE DAY: PUTTING EARNINGS INTO PERSPECTIVE
With first-quarter earnings basically in the books (99% of S&P 500 companies have reported for Q1 2010), today’s chart provides some long-term perspective to the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. Today’s chart illustrates how earnings declined over 92% from its Q3 2007 peak to Q1 2009 low — the largest decline on record (the data goes back to 1936). Since its Q1 2009 low, S&P 500 earnings have surged (up over 700%) and currently come in at a level that has only been exceeded during the latter years of the dot-com and credit bubbles.
Notes:
- Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.
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If you take out financials, how different does this chart look? Probably a lot.
You can’t pick and choose the composition of the market. It is what it is.
So large (and too big to fail) companies are doing well. Meanwhile, small companies are not hiring and financing may be a combination of tight credit and small companies not interested in expanding. A stock market going higher and jobless recovery? Strange times.