As 2015 third quarter earnings wind down, here’s a look at how the markets are stacking up. Overall, we’re seeing that S&P 500 earnings have come in as anticipated; about two percent down year over year. If energy companies are excluded, it’s showing about six percent gains year over year.
The sectors showing the best results include consumer discretionary, information technology, and healthcare, they have been the strongest to date while materials and energy are largely underperforming. The biggest factor driving the market as of late? The Fed. With strong jobs numbers and lack of foreign market volatility, it looks as if they are going to give the green light on raising interest rates.
From this, one thing investors should understand is that volatility driven by company information, general economics, and politics is to come. The Fed “put” on markets and while it may feel comfortable, it’s not really a good thing. Volatility works for investors, get used to it!
One last takeaway is that inflation is low, so many of the larger companies that do business overseas are showing lower revenues on year over year comparisons. Much of this is a result of lower foreign currency from low inflation. The good news? Even though modestly, the economy is continuing to grow.