-Investors worry SPX Q2 EPS comp could be negative

-But 2020 10%+ EPS growth more important

-Here’s a surprise: FactSet says 2Q EPS could turn out positive

From a tactical view, knowing what’s expected quarter by quarter is de rigueur. After all, you need some ammunition for those cocktail party discussions. Moreover, the headlines are blaring “earnings recession,” that is, negative earnings per share results by the S&P 500 index in two consecutive quarters. Feels scary. (In the first quarter, the companies in the S&P 500 index produced a 0.3% decline in growth.) The last time the S&P 500 saw an “earnings recession” was 3 years ago during the second quarter of 2016. What headlines don’t mention is that since then the market is up by about a third.

I’m giving you our heads up on the second quarter earnings season for the S&P 500 index, which began in earnest this week. Let’s qualify this immediately by noting that what investors are expecting in the way of 2020 market EPS growth is far more important by now—past the midyear point of 2019—than 2019’s second or even third quarter, though the latter are more immediate. The market discounts the future.

What’s on tap for the second period? FactSet’s estimate for the second qua...

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