Chicago, IL – July 5, 2019 – Zacks Market Edge is a podcast hosted weekly by cks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="How to Invest for the 2019 Earnings Growth Slowdown” data-reactid=”15″>How to Invest for the 2019 Earnings Growth Slowdown
Welcome to Episode #184 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week she’s joined by Zacks Director of Research, Sheraz Mian, to discuss what is going on with the earnings outlook for the second quarter and the full year.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="After a fantastic earnings year in 2018, where S&P 500 (SPY) earnings grew an astounding 23.3% thanks to the corporate tax cuts, earnings are currently expected to rise just 0.9% on the year.” data-reactid=”19″>After a fantastic earnings year in 2018, where S&P 500 (SPY) earnings grew an astounding 23.3% thanks to the corporate tax cuts, earnings are currently expected to rise just 0.9% on the year.
And the second quarter is expected to be the weakest of the year with earnings forecast to decline 2.9% after falling 0.2% in Q1.
Additionally, the small-cap S&P 600 index is also expected to have a tough second quarter, with earnings forecast to fall 8.8%.
Is the earnings weakness signaling something “bad” like a recession possibly being on the horizon?
Or is it a red herring?
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Technology to Blame?” data-reactid=”24″>Technology to Blame?
The technology sector is one of the largest sectors in the S&P 500, with 22.6% of the index’s total earnings.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Thanks to the semiconductors, which have seen their earnings estimates cut in half the last two quarters, and Apple (AAPL), which is expected to see a fiscal 2019 earnings decline of 3.7%, the technology sector is now weighing on the entire index.” data-reactid=”26″>Thanks to the semiconductors, which have seen their earnings estimates cut in half the last two quarters, and Apple (AAPL), which is expected to see a fiscal 2019 earnings decline of 3.7%, the technology sector is now weighing on the entire index.
For the second quarter, earnings in the group are expected to decline 10.6% while revenue jumps 2.4%.
Earnings aren’t expected to get back into the positive in the tech group until the first quarter of 2020.
How can investors protect themselves during this earnings softness?
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Look for Large Caps with Strong Businesses” data-reactid=”30″>Look for Large Caps with Strong Businesses
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="1. Adobe (ADBE) isn’t expected to see the technology earnings growth slowdown. Earnings are forecast to rise 15.5% in fiscal 2019 and another 24% in fiscal 2020. Revenues are still expected to grow by the double digits this year and next. It’s not cheap, with a forward P/E of 38, but investors are paying for that strong growth.” data-reactid=”31″>1. Adobe (ADBE) isn’t expected to see the technology earnings growth slowdown. Earnings are forecast to rise 15.5% in fiscal 2019 and another 24% in fiscal 2020. Revenues are still expected to grow by the double digits this year and next. It’s not cheap, with a forward P/E of 38, but investors are paying for that strong growth.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="2. Oracle (ORCL) is one of the “old” tech names which is growing revenue at just single digits but it’s cheap with a forward P/E of only 14.9. It, too, is expected to see solid earnings growth this fiscal year of 11%. It pays a dividend currently yielding 1.7%.” data-reactid=”32″>2. Oracle (ORCL) is one of the “old” tech names which is growing revenue at just single digits but it’s cheap with a forward P/E of only 14.9. It, too, is expected to see solid earnings growth this fiscal year of 11%. It pays a dividend currently yielding 1.7%.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="3. Microsoft (MSFT) is still putting together double-digit earnings growth despite being one of the old kids on the block. Earnings are expected to rise 18% this fiscal year and 11% next fiscal year for the tech giant. It also pays a dividend, currently yielding 1.4%.” data-reactid=”33″>3. Microsoft (MSFT) is still putting together double-digit earnings growth despite being one of the old kids on the block. Earnings are expected to rise 18% this fiscal year and 11% next fiscal year for the tech giant. It also pays a dividend, currently yielding 1.4%.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Looking for Stocks with Skyrocketing Upside?” data-reactid=”34″>Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="See the pot trades we’re targeting>>” data-reactid=”37″>See the pot trades we’re targeting>>
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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.” data-reactid=”46″>Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Adobe Systems Incorporated (ADBE) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research” data-reactid=”47″>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Adobe Systems Incorporated (ADBE) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
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