State of the Corporation Address

What a "State of Wall Street" Address Would Sound Like

January 28, 2019

By Michael List, CFP®
Portfolio Manager

Every year around this time, the President provides a report to a joint session of the United States Congress.  Looking past the politics, today I wanted to shed light on the state of corporate America:

“We are a quarter of the way through earnings season, and as expected, results have been strong.  Average earnings per share have increased 14.2 percent from a year ago.”

[*Pause for applause]

“Seventy percent of companies have beaten analysts’ earnings expectations.”

[*Pause]

“Ten of the 11 sectors are reporting earnings and revenue growth.”

[*Pause].

“Companies project revenue and earnings to increase around 6 percent during 2019.”

[*Last Pause — otherwise this summary will last two hours].


SP 500 2018 Q4
Source: I/B/E/S data from Refinitiv
Broadly, results have been strong, the tone of the earnings call reports are positive with a touch of caution. Firms expect revenue to grow for the full year, but politics and trade cloud the near term outlook. As a result, companies have lowered earnings growth expectations for next quarter. In response to this uncertainty, many companies are focusing on the expenses they can control and leveraging technology to improve productivity.

How is the Market Reacting?

The market has been reacting to earnings calls as expected. Stock prices for companies that have beat or met earnings expectations have been positive, while companies that had disappointing results underperformed.  If you would like more information on quarterly earnings for stocks in your portfolio, reach out to your wealth advisor today.

We wish you all the best in 2019.  Thank you, and God bless America.

About the Author

Michael List, CFP®

Michael List is a Portfolio Manager, helping execute investment strategy, transactional execution and overall portfolio management for Security National Bank's Wealth Management Division. He has been a member of the SNB Wealth Management team since 2008.