Jan 23, 2020

S&P 500 companies expect declining earnings and profit margins for Q4

Dion Rabouin, author of Markets
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Reproduced from FactSet; Chart: Axios Visuals

S&P 500 companies are poised to see a 2.1% decline in earnings along with net profit margins of 10.7% , FactSet data show, based on reports from the companies that have so far reported their results from the fourth quarter of 2019.

Why it matters: Both numbers suggest overall weakness in 2019, analysts say.

What it means: "If 10.7% is the actual net profit margin for the quarter, it will mark the first time the index has reported four straight quarters of year-over-year declines in net profit margin since Q4 2008 through Q3 2009," FactSet senior earnings analyst John Butters writes.

  • "Eight of the 11 sectors are reporting a year-over-year decline in their net profit margins in Q4 2019, led by the Energy (4.7% vs. 7.4%), Information Technology (21.4% vs. 22.7%), and Consumer Discretionary (5.9% vs. 7.0%) sectors."

Go deeper: The S&P 500 could be overvalued

Go deeper

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Data: The Center for Systems Science and Engineering at Johns Hopkins; Chart: Naema Ahmed/Axios

The epicenter of the COVID-19 pandemic has moved from China to Europe to the United States and now to Latin America.

Why it matters: Up until now, the pandemic has struck hardest in relatively affluent countries. But it's now spreading fastest in countries where it will be even harder to track, treat and contain.

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Illustration: Sarah Grillo/Axios

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Minnesota activates National Guard amid fallout from George Floyd death

A portrait of George Floyd hangs on a street light pole in Minneapolis. Photo: Stephen Maturen/Getty Images

George Floyd, 46, moved to Minnesota to improve his life and become his "best self," but instead, he is dead because of Minneapolis police.

The latest: Minnesota Gov. Tim Walz declared a state of emergency and activated the state's National Guard in response to violent clashes over the past two days between police and protesters in the Twin Cities.