Homrich & Berg sees concentrated earnings growth threatening stock rally’s breadth
SPY•Homrich & Berg’s analysis says S&P 500 third-quarter earnings per share are forecast to rise 24.7%, but growth excluding technology and energy is expected to slow to 5.3% from 13.3% in the second quarter.
1. Growth remains concentrated
The analysis warns that concentrated earnings growth threatens the broadening U.S. stock rally. S&P 500 third-quarter earnings per share are forecast to increase 24.7% on revenue growth of 12.2%, while earnings growth excluding technology and energy is expected to slow to 5.3% from 13.3% in the second quarter.
2. Risks to participation
Estimate revision momentum has turned negative for the S&P 500. The analysis says higher fuel costs threaten margins outside technology and elevated interest rates weigh on small-cap stocks, putting broader market participation at risk.
