S&P 500 Q2 2009 Earnings Preview

Click on the images to enlarge -- The Second Table is very important.

You may be reading in newspaper, blogs and etc that "investors" are trying to turn to 2009 Quarter 2 for clues on the recovery, after a series of "scary" economic data recently. I think the investing community is settling for EPS of US $ 50 for S&P 500 for 2009 and another 10% improvement for 2010. Based on the first table, it will give you a feel of where the S&P 500 fair value should be.(Forget about the shaded earning estimates as it was done in October 2008)

On the second table, the market is expecting roughly 40% 2009 Quarter 2 improvement over 2009 Quarter 1. The sectors of sharp turnaround are expected from energy, consumer discretionary, financials and materials(see the yellow highlights). Any dissapointments in these four sectors will force the market to adjust to a new equalibrium.