The Xchange Blog

Q1 2019: Traders Prepare For Earnings Season. Slow Growth Expectations.

Believe or not, even as the snow still falls on the East coast, the Q1 2019 earnings season is upon us. We are just a couple of weeks away from the latest reporting cycle, as financials are set to kick things off.

Overall, the expectation is that earnings will decline slightly compared to Q4 2018. This could be the first earnings decline since the second quarter of 2016. Last year saw a tailwind provided by federal tax cut legislation, after steady growth in 2017.

Aggregate earnings for the S&P 500 are projected to be -3.9% lower than the same period last year on 4% higher revenues. Traders may recall that earnings growth in Q4 2018 was 13.4 percent.

Below is some food for thought as outlined by FactSet.

Earnings Growth: For Q1 2019, the estimated earnings decline for the S&P 500 is -3.9%. If -3.9% is the actual decline for the quarter, it will mark the first year-over-year decline in earnings for the index since Q2 2016.

Earnings Revisions: On December 31, the estimated earnings growth rate for Q1 2019 was 2.9%. All eleven sectors have lower growth rates today (compared to December 31) due to downward revisions to EPS estimates.

Earnings Guidance: For Q1 2019, 79 S&P 500 companies have issued negative EPS guidance and 28 S&P 500 companies have issued positive EPS guidance.

Valuation: The forward 12-month P/E ratio for the S&P 500 is 16.3. This P/E ratio is below the 5-year average (16.4) but above the 10-year average (14.7).

Earnings Scorecard: For Q1 2019 (with 20 companies in the S&P 500 reporting actual results for the quarter), 17 S&P 500 companies have reported a positive EPS surprise and 11 have reported a positive revenue surprise.

Below is a table identifying the percentage of names in each index that is reporting, arranged by trading week. Following that table is a list of Top Ten Holdings for key indexes, along with their earnings announcement dates, and corresponding bold trades using Direxion Leveraged ETFs.

 

Source: Bloomberg.

 

Q1 Quarterly Earnings Calendar

(All index data as of 3/31/2019)

 

S&P 500 Index (SPXT)   S&P 400 Index (MID)
Top 10 Weights Ticker Weight in the index Expected Earnings Release Top 10 Weights Ticker Weight in the index Expected Earnings Release
MICROSOFT CORP MSFT UW 3.85% 5/1/2019 IDEX CORP IEX UN 0.69% 4/29/2019
APPLE INC AAPL UW 3.56% 4/30/2019 ZEBRA TECHNOLOGIES CORP-CL A ZBRA UW 0.68% 5/7/2019
AMAZON.COM INC AMZN UW 3.13% 4/25/2019 STERIS PLC STE UN 0.63% 5/8/2019
FACEBOOK INC-CLASS A FB UW 1.70% 4/24/2019 ULTIMATE SOFTWARE GROUP INC ULTI UW 0.63% 4/30/2019
BERKSHIRE HATHAWAY INC-CL B BRK/B UN 1.66% 5/6/2019 TRIMBLE INC TRMB UW 0.61% 5/6/2019
JOHNSON & JOHNSON JNJ UN 1.57% 4/16/2019 DOMINO’S PIZZA INC DPZ UN 0.61% 4/25/2019
ALPHABET INC-CL C GOOG UW 1.55% 4/29/2019 PTC INC PTC UW 0.60% 4/17/2019
ALPHABET INC-CL A GOOGL UW 1.52% 4/29/2019 CAMDEN PROPERTY TRUST CPT UN 0.59% 5/5/2019
EXXON MOBIL CORP XOM UN 1.46% 4/26/2019 UGI CORP UGI UN 0.59% 5/1/2019
JPMORGAN CHASE & CO JPM UN 1.39% 4/12/2019 NVR INC NVR UN 0.58% 4/18/2019
Related Funds:

Related Funds:

 Russell 2000® Index (RU20INTR)    Russell 1000 Financial Services Index (RGUSFLA)  
Top 10 Weights Ticker Weight in the index Expected Earnings Release Top 10 Weights Ticker Weight in the index Expected Earnings Release
ETSY INC ETSY UW 0.40% 5/7/2019 BERKSHIRE HATHAWAY INC-CL B BRK/B UN 7.38% 5/6/2019
FIVE BELOW FIVE UW 0.32% 3/27/2019 JPMORGAN CHASE & CO JPM UN 6.28% 4/12/2019
INTEGRATED DEVICE TECH INC IDTI UW 0.32% 4/29/2019 VISA INC-CLASS A SHARES V UN 5.20% 4/24/2019
TRADE DESK INC/THE -CLASS A TTD UQ 0.31% 5/9/2019 BANK OF AMERICA CORP BAC UN 4.66% 4/16/2019
HUBSPOT INC HUBS UN 0.31% 5/9/2019 MASTERCARD INC – A MA UN 4.03% 5/1/2019
PLANET FITNESS INC – CL A PLNT UN 0.29% 5/7/2019 WELLS FARGO & CO WFC UN 3.84% 4/12/2019
CREE INC CREE UW 0.29% 5/1/2019 CITIGROUP INC C UN 2.76% 4/15/2019
CIENA CORP CIEN UN 0.27% 5/30/2019 PAYPAL HOLDINGS INC PYPL UW 2.30% 4/24/2019
PRIMERICA INC PRI UN 0.26% 5/7/2019 AMERICAN TOWER CORP AMT UN 1.62% 5/1/2019
COUPA SOFTWARE INC COUP UW 0.25% 6/3/2019 AMERICAN EXPRESS CO AXP UN 1.45% 4/18/2019
Related Funds:

Related Funds:

Technology Select Sector Index (IXTTR) Health Care Select Sector Index (IXVTR)
Top 10 Weights Ticker Weight in the index Expected Earnings Release Top 10 Weights Ticker Weight in the index Expected Earnings Release
MICROSOFT CORP MSFT UW 18.22% 5/1/2019 JOHNSON & JOHNSON JNJ UN 10.79% 4/16/2019
APPLE INC AAPL UW 16.85% 4/30/2019 PFIZER INC PFE UN 6.89% 4/30/2019
VISA INC-CLASS A SHARES V UN 5.47% 4/24/2019 UNITEDHEALTH GROUP INC UNH UN 6.83% 4/16/2019
INTEL CORP INTC UW 4.84% 4/25/2019 MERCK & CO. INC. MRK UN 6.26% 4/30/2019
CISCO SYSTEMS INC CSCO UW 4.72% 5/15/2019 ABBOTT LABORATORIES ABT UN 4.06% 4/17/2019
MASTERCARD INC – A MA UN 4.24% 5/1/2019 MEDTRONIC PLC MDT UN 3.57% 5/23/2019
ORACLE CORP ORCL UN 2.73% 6/18/2019 ABBVIE INC ABBV UN 3.48% 5/2/2019
ADOBE INC ADBE UW 2.61% 6/18/2019 AMGEN INC AMGN UW 3.43% 4/23/2019
INTL BUSINESS MACHINES CORP IBM UN 2.51% 4/16/2019 ELI LILLY & CO LLY UN 3.31% 4/30/2019
SALESFORCE.COM INC CRM UN 2.46% 5/28/2019 THERMO FISHER SCIENTIFIC INC TMO UN 3.19% 4/24/2019
Related Funds:

Related Funds:

S&P Consumer Discretionary Index (IXYTR) S&P Consumer Staples Index (IXRTR)
Top 10 Weights Ticker Weight in the index Expected Earnings Release Top 10 Weights Ticker Weight in the index Expected Earnings Release
AMAZON.COM INC AMZN UW 24.27% 4/25/2019 PROCTER & GAMBLE CO/THE PG UN 14.98% 4/23/2019
HOME DEPOT INC HD UN 9.87% 5/21/2019 COCA-COLA CO/THE KO UN 10.43% 4/23/2019
MCDONALD’S CORP MCD UN 6.62% 4/30/2019 PEPSICO INC PEP UW 9.96% 4/17/2019
NIKE INC -CL B NKE UN 4.84% 6/27/2019 WALMART INC WMT UN 8.14% 5/16/2019
STARBUCKS CORP SBUX UW 4.19% 4/25/2019 MONDELEZ INTERNATIONAL INC-A MDLZ UW 4.63% 4/30/2019
LOWE’S COS INC LOW UN 3.92% 5/22/2019 COSTCO WHOLESALE CORP COST UW 4.54% 5/30/2019
BOOKING HOLDINGS INC BKNG UW 3.67% 5/8/2019 ALTRIA GROUP INC MO UN 4.46% 4/25/2019
TJX COMPANIES INC TJX UN 3.02% 5/21/2019 PHILIP MORRIS INTERNATIONAL PM UN 4.39% 4/18/2019
GENERAL MOTORS CO GM UN 2.23% 4/30/2019 COLGATE-PALMOLIVE CO CL UN 4.05% 4/26/2019
TARGET CORP TGT UN 1.92% 5/22/2019 WALGREENS BOOTS ALLIANCE INC WBA UW 3.48% 4/2/2019
Related Funds:

Related Funds:

S&P Industrials Select Sector Index (IXITR) S&P Energy Select Sector Index (IXETR)
Top 10 Weights Ticker Weight in the index Expected Earnings Release Top 10 Weights Ticker Weight in the index Expected Earnings Release
BOEING CO/THE BA UN 8.86% 4/24/2019 EXXON MOBIL CORP XOM UN 22.48% 4/26/2019
3M CO MMM UN 5.43% 4/23/2019 CHEVRON CORP CVX UN 19.35% 4/26/2019
UNION PACIFIC CORP UNP UN 5.32% 4/18/2019 CONOCOPHILLIPS COP UN 6.38% 4/26/2019
HONEYWELL INTERNATIONAL INC HON UN 5.23% 4/18/2019 EOG RESOURCES INC EOG UN 4.55% 5/2/2019
UNITED TECHNOLOGIES CORP UTX UN 4.65% 4/23/2019 SCHLUMBERGER LTD SLB UN 4.48% 4/18/2019
GENERAL ELECTRIC CO GE UN 4.00% 4/18/2019 OCCIDENTAL PETROLEUM CORP OXY UN 4.16% 5/7/2019
CATERPILLAR INC CAT UN 3.45% 4/24/2019 MARATHON PETROLEUM CORP MPC UN 3.46% 4/29/2019
UNITED PARCEL SERVICE-CL B UPS UN 3.43% 4/25/2019 PHILLIPS 66 PSX UN 3.40% 4/30/2019
LOCKHEED MARTIN CORP LMT UN 3.30% 4/23/2019 KINDER MORGAN INC KMI UN 3.24% 4/17/2019
CSX CORP CSX UW 2.58% 4/16/2019 VALERO ENERGY CORP VLO UN 3.01% 4/25/2019
Related Funds:

Related Funds:

S&P Utilities Select Sector Index (IXUTR) Dynamic Pharmaceutical Intellidex Index (DZRTR)
Top 10 Weights Ticker Weight in the index Expected Earnings Release Top 10 Weights Ticker Weight in the index Expected Earnings Release
NEXTERA ENERGY INC NEE UN 11.70% 4/23/2019 ELI LILLY & CO LLY US 5.41% 4/30/2019
DUKE ENERGY CORP DUK UN 8.35% 5/9/2019 ABBOTT LABORATORIES ABT US 5.33% 4/17/2019
DOMINION ENERGY INC D UN 7.71% 4/26/2019 MERCK & CO. INC. MRK US 5.27% 4/30/2019
SOUTHERN CO/THE SO UN 6.82% 5/1/2019 JOHNSON & JOHNSON JNJ US 5.19% 4/16/2019
EXELON CORP EXC UN 6.17% 5/1/2019 AMGEN INC AMGN US 5.15% 4/23/2019
AMERICAN ELECTRIC POWER AEP UN 5.32% 4/25/2019 PFIZER INC PFE US 5.11% 4/30/2019
SEMPRA ENERGY SRE UN 4.31% 5/6/2019 BRISTOL-MYERS SQUIBB CO BMY US 4.89% 4/25/2019
PUBLIC SERVICE ENTERPRISE GP PEG UN 3.80% 4/29/2019 BIOGEN INC BIIB US 3.68% 4/24/2019
XCEL ENERGY INC XEL UW 3.70% 4/25/2019 HORIZON PHARMA PLC HZNP US 3.47% 5/8/2019
CONSOLIDATED EDISON INC ED UN 3.45% 5/2/2019 ALLERGAN PLC AGN US 3.03% 4/26/2019
Related Funds:

Related Funds:

S&P Retail Select Industry Index (SPSIRETR) S&P Biotechnology Select Industry Index (SPSIBITR)
Top 10 Weights Ticker Weight in the index Expected Earnings Release Top 10 Weights Ticker Weight in the index Expected Earnings Release
CARVANA CO CVNA UN 1.36% 5/8/2019 LIGAND PHARMACEUTICALS LGND UQ 1.75% 5/7/2019
ULTA BEAUTY INC ULTA UW 1.30% 5/30/2019 MIRATI THERAPEUTICS INC MRTX UW 1.72% 5/7/2019
ADVANCE AUTO PARTS INC AAP UN 1.29% 5/23/2019 IONIS PHARMACEUTICALS INC IONS UW 1.72% 5/3/2019
AMAZON.COM INC AMZN UW 1.28% 4/25/2019 NEUROCRINE BIOSCIENCES INC NBIX UW 1.71% 4/29/2019
TIFFANY & CO TIF UN 1.27% 6/4/2019 IMMUNOMEDICS INC IMMU UQ 1.67% 5/9/2019
OFFICE DEPOT INC ODP UW 1.26% 5/8/2019 INTERCEPT PHARMACEUTICALS IN ICPT UW 1.66% 5/7/2019
L BRANDS INC LB UN 1.25% 5/22/2019 BLUEBIRD BIO INC BLUE UW 1.66% 5/1/2019
BJ’S WHOLESALE CLUB HOLDINGS BJ UN 1.25% 6/15/2019 SEATTLE GENETICS INC SGEN UW 1.64% 4/25/2019
CARMAX INC KMX UN 1.25% 3/29/2019 SAGE THERAPEUTICS INC SAGE UQ 1.64% 5/2/2019
STITCH FIX INC-CLASS A SFIX UW 1.25% 6/10/2019 ARRAY BIOPHARMA INC ARRY UQ 1.63% 5/7/2019
Related Funds:

Related Funds:

S&P Oil & Gas Exploration and Production Index (SPSIOP) S&P Regional Banks Select Industry Index (SPSIRBKT)
Top 10 Weights Ticker Weight in the index Expected Earnings Release Top 10 Weights Ticker Weight in the index Expected Earnings Release
CALIFORNIA RESOURCES CORP CRC UN 2.43% 5/2/2019 FIRST REPUBLIC BANK/CA FRC UN 1.84% 4/12/2019
OASIS PETROLEUM INC OAS UN 2.27% 5/6/2019 CIT GROUP INC CIT UN 1.80% 4/23/2019
DEVON ENERGY CORP DVN UN 2.26% 5/1/2019 PNC FINANCIAL SERVICES GROUP PNC UN 1.78% 4/12/2019
NOBLE ENERGY INC NBL UN 2.23% 4/30/2019 SIGNATURE BANK SBNY UW 1.78% 4/18/2019
CHESAPEAKE ENERGY CORP CHK UN 2.23% 5/1/2019 STERLING BANCORP/DE STL UN 1.78% 4/23/2019
WHITING PETROLEUM CORP WLL UN 2.19% 4/30/2019 PEOPLE’S UNITED FINANCIAL PBCT UW 1.77% 4/18/2019
RANGE RESOURCES CORP RRC UN 2.16% 4/25/2019 CULLEN/FROST BANKERS INC CFR UN 1.76% 4/25/2019
SM ENERGY CO SM UN 2.15% 5/2/2019 PACWEST BANCORP PACW UW 1.76% 4/16/2019
WPX ENERGY INC WPX UN 2.15% 5/1/2019 FIFTH THIRD BANCORP FITB UW 1.74% 4/23/2019
APACHE CORP APA UN 2.13% 5/1/2019 FIRST HORIZON NATIONAL CORP FHN UN 1.74% 4/12/2019
Related Funds:

Related Funds:

MSCI US REIT Index (RMSG) PHLX Semiconductor Sector Index (XSOX)
Top 10 Weights Ticker Weight in the index Expected Earnings Release Top 10 Weights Ticker Weight in the index Expected Earnings Release
SIMON PROPERTY GROUP INC SPG UN 6.14% 4/25/2019 NVIDIA CORP NVDA UW 8.85% 5/15/2019
PROLOGIS INC PLD UN 4.97% 4/16/2019 QUALCOMM INC QCOM UW 8.39% 5/1/2019
EQUINIX INC EQIX UW 3.94% 5/1/2019 BROADCOM INC AVGO UW 8.33% 6/6/2019
PUBLIC STORAGE PSA UN 3.78% 4/25/2019 TEXAS INSTRUMENTS INC TXN UW 7.91% 4/23/2019
WELLTOWER INC WELL UN 3.24% 4/28/2019 INTEL CORP INTC UW 7.79% 4/25/2019
AVALONBAY COMMUNITIES INC AVB UN 3.04% 4/25/2019 ADVANCED MICRO DEVICES AMD UW 4.22% 4/24/2019
EQUITY RESIDENTIAL EQR UN 3.03% 4/30/2019 TAIWAN SEMICONDUCTOR-SP ADR TSM UN 3.99% 4/18/2019
DIGITAL REALTY TRUST INC DLR UN 2.68% 4/28/2019 APPLIED MATERIALS INC AMAT UW 3.99% 5/16/2019
VENTAS INC VTR UN 2.54% 4/25/2019 LAM RESEARCH CORP LRCX UW 3.95% 4/24/2019
REALTY INCOME CORP O UN 2.39% 5/8/2019 XILINX INC XLNX UW 3.90% 4/24/2019
Related Funds:

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Dow Jones Transportation Average (DJTTR) Dow Jones U.S. Select Aerospace & Defense Index (DJSASDT)
Top 10 Weights Ticker Weight in the index Expected Earnings Release Top 10 Weights Ticker Weight in the index Expected Earnings Release
NORFOLK SOUTHERN CORP NSC UN 10.94% 4/24/2019 BOEING CO/THE BA UN 20.60% 4/24/2019
FEDEX CORP FDX UN 10.56% 6/25/2019 UNITED TECHNOLOGIES CORP UTX UN 17.43% 4/23/2019
UNION PACIFIC CORP UNP UN 9.76% 4/18/2019 LOCKHEED MARTIN CORP LMT UN 6.12% 4/23/2019
KANSAS CITY SOUTHERN KSU UN 6.86% 4/17/2019 TRANSDIGM GROUP INC TDG UN 4.49% 5/7/2019
UNITED PARCEL SERVICE-CL B UPS UN 6.54% 4/25/2019 GENERAL DYNAMICS CORP GD UN 4.31% 4/24/2019
LANDSTAR SYSTEM INC LSTR UW 6.43% 4/24/2019 L3 TECHNOLOGIES INC LLL UN 4.30% 5/1/2019
HUNT (JB) TRANSPRT SVCS INC JBHT UW 5.92% 4/15/2019 RAYTHEON COMPANY RTN UN 4.28% 4/25/2019
C.H. ROBINSON WORLDWIDE INC CHRW UW 5.16% 5/7/2019 HARRIS CORP HRS UN 4.27% 5/1/2019
UNITED CONTINENTAL HOLDINGS UAL UW 4.67% 4/16/2019 NORTHROP GRUMMAN CORP NOC UN 4.07% 4/24/2019
KIRBY CORP KEX UN 4.59% 4/24/2019 TEXTRON INC TXT UN 3.11% 4/17/2019
Related Funds:

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ISE Natural Gas Index (FUMTR)
Dow Jones U.S. Select Home Builders Index (DJSHMBT)
Top 10 Weights Ticker Weight in the index Expected Earnings Release Top 10 Weights Ticker Weight in the index Expected Earnings Release
NOBLE ENERGY INC NBL UN 4.94% 4/30/2019 DR HORTON INC DHI UN 14.03% 4/25/2019
EQT CORP EQT UN 4.84% 4/25/2019 LENNAR CORP-A LEN UN 13.51% 3/27/2019
CABOT OIL & GAS CORP COG UN 4.67% 4/26/2019 NVR INC NVR UN 9.54% 4/18/2019
DEVON ENERGY CORP DVN UN 4.67% 5/1/2019 PULTEGROUP INC PHM UN 6.93% 4/23/2019
RANGE RESOURCES CORP RRC UN 4.51% 4/25/2019 TOLL BROTHERS INC TOL UN 4.85% 5/21/2019
MURPHY OIL CORP MUR UN 4.41% 5/1/2019 LOWE’S COS INC LOW UN 4.52% 5/22/2019
ENCANA CORP ECA UN 4.34% 5/1/2019 HOME DEPOT INC HD UN 4.48% 5/21/2019
NATIONAL FUEL GAS CO NFG UN 4.32% 5/2/2019 SHERWIN-WILLIAMS CO/THE SHW UN 3.29% 4/23/2019
CONCHO RESOURCES INC CXO UN 4.30% 5/5/2019 MASCO CORP MAS UN 2.64% 4/25/2019
ANTERO RESOURCES CORP AR UN 4.28% 4/24/2019 LENNOX INTERNATIONAL INC LII UN 2.35% 4/22/2019
Related Funds:

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