earnings yield was scraping 5% as noted within this earnings update from July 28th ’23. Today, the last trading day of September ’23 and the 3rd quarter, and given the tough August and September, the S&P 500 earnings yield has jumped to 5.43%, a level not seen since mid-May ’23.
Excluding the pandemic meltdown of early 2020, the last time the S&P 500 earnings yield hit a real extreme was the last week of 2018, or Christmas week, when it touched 7% on that Q4 ’18, S&P 500 meltdown. Seems like ancient history now, but it helps to know the extremes. The forward 4-quarter estimate improved this week to $232.95 from last week’s $232.63. It’s the end of the quarter so earnings revisions are slower now until Q3 ’23 earnings start around October 12th – 13th, but of we look forward to the quarterly “bump” in next week’s FFQE, which is the forward estimate for Q4 ’23 through Q3 ’24, the EPS estimate $240.16.The S&P 500 earnings yield is 5.43%, but using next week’s FFQE, the earnings yield is 5.60%. .
Take everything here with a healthy grain of salt: none of this should be construed as advice or recommendations. Past performance is no guarantee of future results and represents only one person’s opinion. All S&P 500 EPS and revenue data is sourced from IBES data by Refinitiv, or from Factset where noted. Capital market can change quickly, both positively and negatively. Use your comfort level with market volatility to adjust your portfolio accordingly.