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Expectations for U.S. stock earnings in the first quarter are the lowest since the global financial crisis, and may suffer more than global peers this year.
What's happening: Blended estimates imply a -13.7% decline in S&P 500 earnings, while in Europe, Japan and emerging markets the fall has been much bigger, "of the order of -31 to -34%," Deutsche Bank research analysts write in a note to clients.
But, but, but: Having been hit earlier by the coronavirus outbreak, companies in Europe, Japan and emerging Asia are on pace to deliver horrific Q1 numbers but are expected to see better earnings than the U.S. as the year progresses.
- "Since earnings season began, the bottom-up analyst consensus has downgraded earnings for Q2 and for 2020 as a whole by more for the US (-10.5%) than it has for Europe (-8.8%) and EM (-7.6%)," Deutsche's chief global strategist Binky Chadha and other top strategists note.
- "For EM, led by China, the bottom up consensus sees earnings as having already bottomed in Q1, with a strong rebound expected in Q4 this year."
Watch this space: As earnings have tumbled, U.S. companies' price-to-earnings ratios have soared to near the highest since the dot-com bubble burst.
- The S&P's 12-month forward P/E ratio has risen to 20.4, well above its five-, 10- and 20-year averages and the highest since 2001, but still below a peak of 23.4 touched in September 2000, according to FactSet data.