Macro Wrap – Earnings Contribution by Sector

With financials earnings essentially over, the focus shifts to other sectors.  Here is the contribution to S&P 500 earnings by sector:

 

S&P 500 Index Earnings by Sector, Courtesy of Bloomberg

S&P 500 Index Earnings by Sector, Courtesy of Bloomberg

 

Financials are the largest contributor, at around 19% of S&P 500 earnings, followed by the tech sector, at around 16.5%.  Energy, consumer staples, consumer discretionary, health care, and industrials all contribute around 11 to 12%.

With that in mind, we are now hitting the heart of earnings season.  Here are some important upcoming earnings reports over the next 2 weeks:

  • Jan. 28th:  CAT (am), VMW (pm), YHOO (pm)
  • Jan. 29th:  AMZN (pm), BRCM (pm), GLW (am), DHI (am), LLY (am), EMC (am), F(am), HOG (am), IP (am), BTU (am), TYC (am), X (am), VLO (am)
  • Jan. 30th:  BA (am), CTXS (pm), COP (pm), EA (pm), FB (pm), HES (am), LVS (pm), NOC (am), QCOM (pm)
  • Jan 31st:  AET (am), AN (am), BX (am), CB (pm), CL (am), DOW (am), MA (am), OXY (am), PHM (am), SHW (am), UA (am), UPS (am), VIAB (am)
  • Feb 1st:  CVX (am),  LYB (am), MRK (am), TSN (am), XOM (am)
  • Feb 4th:  APC (am), BIDU (pm), GILD (pm), HUM (am), SPG (am), SOHU (am), YUM (pm)
  • Feb 5th:  AFL (am), ADM (am), CMG (pm), EL (am), PNRA (pm), DIS (pm)
  • Feb 6th:  AKAM (pm), ALL (pm), CMI (am), CVS (am), GMCR (pm), ICE (am), ORLY (pm), PRU (pm), RL (am), TSO (pm), V (pm), YELP (pm)
  • Feb 7th:  BG (am), CSTR (pm), EXPE, LNKD (pm), PM (am), RVBD (pm), S (am)
  • Feb 8th: CBOE (am), TRLG (am)

In addition, this week has a heavy economic calendar, with the Fed Meeting Release on Wednesday the most important early in the week:

  • Jan 28th:  Durable Goods, Pending Home Sales, Dallas Fed Manufacturing
  • Jan 29th:  CaseShiller Home Price Index, Consumer Confidence
  • Jan 30th:  ADP Employment change, 4th Quarter GDP, FOMC Rate Decision
  • Jan 31st:   Personal Income and Spending, Initial and Continuing Jobless Claims
  • Feb 1st:  Nonfarm Payrolls, UMich Confidence, ISM Manufacturing

Expect short-term volatility to maintain a bid until at least the Fed decision on Wednesday.  I’m curious to see whether the heavy event schedule does anything to realized volatility this week, after a very quiet last 2 weeks.  Low implied volatility means market participants are still not expecting many big moves this week.  The weekly 150 SPY straddle closed on Friday around 1.60, or about a 1% move in either direction for the entire week.

Markets overnight:  

  • Asia was mostly higher, led by the Shanghai index up 2.5%, after the Chinese govt eased restrictions on margin trading.
  • Europe is up 0.2% on low volume trading.  SPX futures are down 0.1%.
  • The dollar is mostly higher, but Treasuries are flat after Friday’s move lower.  Commodities are close to unchanged with the exception of Nat Gas, down 3%.
  • CAT up 0.5% after earnings.  Provided very wide guidance for 2013, $7-$9 vs. analyst estimates of $8.54.