The SPDR S&P 500 ETF Trust (NYSE:SPY) recently hit its lowest level of 2022 this week despite overall first-quarter earnings numbers that are relatively solid. Unfortunately, Bank of America analyst Savita Subramanian said overall S&P 500 earnings numbers for the first quarter aren’t as strong as they may seem at first glance, and the index is experiencing a “death by paper cuts.”
The Numbers
Subramanian said S&P 500 EPS is up 11 percent year-over-year, exceeding consensus estimates by about 6 percent on the quarter. However, she said guidance updates this quarter have been the worst since the COVID-19 pandemic hit in the second quarter of 2020. As a result, Subramanian said the S&P 500 is at a high risk of significantly missing full-year consensus ESP estimates of $251. Bank of America is projecting just $230 in 2022 S&P 500 EPS with a downside of around $200 if the U.S. economy falls into a recession.Related Link: This ‘Markets In Turmoil’ Indicator Has Worked 100 percent Of The Time: Here’s What Traders Need To Know
“We see risks to 2023 earnings even under a no recession scenario. We are 8 percent below consensus, and see risks to earnings in Consumer Discretionary, Materials, and other big-ticket exposed sectors,” Subramanian said.
