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1-5-2020 SP 500 Index 2020 volatility is coming big time Earnings Season Preview 2020


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Earnings are starting stock prices to this date are overbought going into the reports that will be released the 2020 volatility is coming big time beware option markets are changing in 2020 retail options traders going to get killed this year.
S&P 500 is expected to report a decline in earnings of -1.5% for the fourth quarter. What is the likelihood the index will report an actual decline in earnings of -1.5% for the quarter?
We are telling all our options traders that the options markets are changing in 2020 retail options traders going to get killed this year they steal the premium they inflate the prices then drop them on your asses period join us 2020 volatility is coming back we are overbought as of this date the earnings are not there period
Based on the average change in earnings growth due to companies reporting positive earnings surprises, it is likely the index will report earnings growth for Q4.
When companies in the S&P 500 report actual earnings above estimates during an earnings season, the overall earnings growth rate for the index increases because the higher actual EPS numbers replace the lower estimated EPS numbers in the calculation of the growth rate. For example, if a company is projected to report EPS of $1.05 compared to the year-ago EPS of $1.00, the company is expected to report earnings growth of 5%. If the company reports actual EPS of $1.10 (a $0.05 upside earnings surprise compared to the estimate), the real earnings growth for the company for the quarter is now 10%, five percentage points above the estimated growth rate (10% - 5% = 5%).
Over the past five years, on average, actual earnings reported by S&P 500 companies have exceeded estimated earnings by 4.9%. During this same period, 72% of companies in the S&P 500 have reported actual EPS above the mean EPS estimate on average. As a result, from the end of the quarter through the end of the earnings season, the earnings growth rate has typically increased by 3.6 percentage points on average (over the past five years) due to the number and magnitude of positive earnings surprises.
If this average increase is applied to the estimated earnings decline at the end of Q4 (December 31) of -1.5%, the actual earnings growth rate for the quarter would be 2.1% (-1.5% + 3.6% = 2.1%).
If the index does report the growth of 2.1% for Q4 2019, it will mark the first time the index has published (year-over-year) earnings growth since Q4 2018.

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