Yahoo Finance: “There could be virtually no earnings growth in Q1”

Excerpt from Yahoo Finance quoting DataTrek’s Nick Colas:

…. “The earnings picture is looking bleaker and bleaker for 2019.

Analysts surveyed by FactSet are expecting only 0.7% year-over-year earnings growth for the first quarter of 2019 for S&P 500 companies.

“The problem is not revenues (expectations there are still +6%), but rather margins,” wrote Nick Colas, co-founder of DataTrek Research, in a note to clients. “While that’s an understandable trend this late in an economic cycle, negative earnings leverage is never an investment positive.”

The setup for second quarter earnings aren’t looking much better with the consensus estimate of 2.4% growth.

The dimmer growth rates come amid tougher comparables for 2019 vs. 2018 compared to 2018 vs. 2017 amid the corporate tax cuts that took effect in early 2018.

With earnings growth taking a backseat, some of the market’s other big worries need to subside in order for stocks to move higher, according to Colas”….

Read the full article here on Yahoo Finance!

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