Inflation hitting hard - Factset

Negative Guidance

Q1 saw the highest number of S&P 500 companies issuing negative EPS guidance for a quarter since Q4 2019 (73), and the lowest number of S&P 500 companies giving positive EPS advice for a quarter since Q2 2020 (25)


The projected annual growth rate is expected to fall:
Today, the S&P 500 is likely to post 4.8 percent year-over-year earnings growth, compared to 5.7 percent year-over-year profits growth on December 31.

  • Leading sectors predict earnings increase - Energy, Materials, and Industrials - Sectors foresee earnings drop - Finance and Consumer Discretionary

This is not surprising. Rising input costs will continue to pressure a wide range of businesses. Corporations with price power will perform well, but companies only have a limited amount of pricing power. Coupled with the Fed’s tightening, the stock market faces some challenging conditions in the coming months.

That is not to argue that certain firms will continue to outperform.