Chart of the day - US500 (18.02.2025)

Global stock markets continue their bullish run, reaching new record highs. In this analysis, we take a closer look at the U.S. earnings season using FactSet data, attempting to determine whether strong financial reports from American companies are truly driving market sentiment. So far, 77% of S&P 500 companies have reported their results.

U.S. Earnings Season Summary

• 76% of companies have exceeded earnings per share (EPS) estimates, slightly below the 5-year and 1-year averages of 77%, but above the 10-year average of 75%. The annual earnings growth for reporting companies reached an impressive 16.9%—the best result since Q4 2021. At the end of December, Wall Street consensus expected year-over-year growth of around 12%. So far, 42 companies have issued disappointing earnings forecasts, while 33 have provided positive guidance. Companies reporting earnings have beaten expectations by an average of 7.3%, compared to a 5-year average of 8.5% and a 10-year average of around 6.7%.
• 62% of S&P 500 companies have exceeded revenue expectations, below the 5-year average of 69% but only slightly under the 10-year average of 64%. Revenue growth for S&P 500 companies stands at 5.2% year-over-year, compared to a 5.9% increase among companies with significant sales exposure outside the U.S. (mainly Big Tech). On average, companies are surpassing revenue expectations by 0.8%, while the 5-year average for S&P 500 revenue beats is 2.1% and the 10-year average is 1.4%.
• Wall Street expects significantly lower earnings growth in the current Q1 2025, with estimates at 8.1% year-over-year for Q1 and 9.9% for Q2 2025. The full-year 2025 consensus projects earnings growth of 12.7% year-over-year.
• In terms of earnings surprises, the technology and financial sectors performed best, while utilities and real estate lagged behind. The consumer discretionary sector saw record-breaking surprises, with average earnings nearly 15% above estimates. Strong earnings growth was reported by companies such as Wynn Resorts, Carnival, MGM Resorts, CarMax, and most notably, Amazon. This trend suggests continued consumer strength and could be a positive indicator for the current quarter.

US500 Chart (H1 Interval)

S&P 500 futures (US500) are reaching record levels from the second half of January, breaking out of a symmetrical triangle formation and crossing above the 6100-point zone. The forward P/E ratio currently stands at 22.2, compared to the 5-year average of 19.8 and the 10-year average of 18.3. Companies within the S&P 500 that generate more than 50% of their revenue domestically have reported earnings growth of 14.4% year-over-year, while those generating over 50% of revenue internationally have seen earnings rise by 20.8% year-over-year.

Source: xStation5

US100 Chart (H1 Interval)

Meanwhile, Nasdaq futures (US100) are climbing to new all-time highs after two recent downward impulses. Both declines had nearly identical ranges, each amounting to approximately 1,300 points. Key support levels can be found between 21,900 and 22,100 points, defined by previous price reactions and the 23.6% Fibonacci retracement of the latest upward move.

Source: xStation5