The bull market is alive and well.
Over the last eight years, we’ve watched the Dow Jones explode 15,074 points. The NASDAQ tacked on 5,001 points. The S&P 500 is up nearly 1,700 points.
The Russell 2000 is up 1,043 points.
And to be honest, the bull market is showing no signs of slowing.
In fact, it could continue for quite some time, especially as corporate earnings keep on showing signs of marked improvement. In the first quarter of 2017, for example, S&P 500 earnings were up 13.6%, marking the biggest quarterly gain in nearly six years.
And now, analysts believe second quarter earnings could be just as good.
In fact, according to CNBC, “we could be in for a big surprise when it comes to second quarter earnings.” While earnings season may have just gotten underway, they note, profits from many of the companies that have already reported are up nearly 12% year over year.
Revenues are up about 8.5% with nearly 90% exceeding estimates so far, too.
CSX Corporation for example just posted a 2% rise in revenue to $2.93 billion, with an 8% drop in expenses to $1.98 billion. That resulted in net earnings of $510 million, $148 million higher than the previous quarter. EPS soared from 39 cents to 55 cents.
United Health Group reported a 30% jump in second quarter earnings, boosted its full-year earnings guidance, and posted $2.28 billion in earnings on $50.05 billion revenue.
Morgan Stanley topped analyst expectations with EPS of 87 cents on revenue of $9.5 billion, as compared to $8.9 billion year over year. And while companies like IBM managed to post its 21st consecutive quarterly revenue decline, analysts are optimistic overall.
For the second quarter 2017, S&P 500 companies are expected to post 8% earnings growth on a 4.6% gain in revenues, according to Thomson Reuters, as reported by Investors Business Daily. “That's a big reversal from a 2.1% profit decline in Q2 2016 as the energy-led earnings slump extended to a fifth consecutive quarter. And it solidifies the comeback that has seen S&P 500 profit growth of 4.3%, 8% and 15.3% in the last three quarters.”
Even better, the third quarter could be just as surprising. At the moment, notes CNBC, 43% of companies have already seen their third quarter estimates raised for the quarter.
It’s all very encouraging, and could very well fuel the bull market for its ninth year.
With corporate growth on a tear, it’s a good bet that we’ll see further market upside. Stay tuned to The Cheap Investor for more on this exciting trend, and new recommendations.