Stock Market Briefing: S&P Revenues & the Economy December 21, 217 Dr. Edward Yardeni 16-972-7683 eyardeni@ Joe Abbott 732-497-36 jabbott@ Mali Quintana 48-664-1333 aquintana@ Please visit our sites at www. blog. thinking outside the box
Table Of Contents Table Of Contents Revenues & Earnings 1 Revenues & Nominal GDP 2-3 Revenues, World Production, & Exports 4 Revenues & Leading Indicators Revenues & US Economic Indicators 6 Revenues & US Business Sales 7-8 Revenues & US Factory Orders 9 Revenues & US Factory Shipments Revenues & US Exports 11 Revenues & US PMIs 12 Revenues, CRB, & TWD 13 Revenues & US GDP 14 Revenues & US Tax Receipts Revenues & Forward Earnings 16 Revenues: Industrial Composite 17 December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
13 12 Revenues & Earnings Figure 1. S&P REVENUES PER SHARE: ACTUAL (S&P quarterly data) & FORWARD (TR weekly data) (dollars) 12/14 13 12 1 1 9 9 8 8 7 6 Revenues Per Share Forward* Actual (quarterly, annualized, nsa) 7 6 4 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 4 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 2, then weekly. Source: Standard & Poor s (for actual revenues) and Thomson Reuters I/B/E/S (for forward revenues). 14 13 Figure 2. S&P FORWARD REVENUES & EARNINGS PER SHARE 12/14 12/14 16 14 12 Forward Revenues* (1294.7) 13 1 Forward Earnings* (14.69) 12 1 9 9 8 7 8 6 7 6 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 4 3 * Time-weighted average of consensus estimates for current year and next year. Source: Thomson Reuters I/B/E/S and Standard & Poor s. Page 1 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
.7 Figure 3. Revenues & Nominal GDP S&P TOTAL REVENUES* DIVIDED BY US NOMINAL GDP.7.6.6.6.6.....4 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2.4 * Revenues are derived by multiplying S&P revenues per share by the S&P divisor for each quarter. Source: US Department of Commerce, Bureau of Economic Analysis, and Standard & Poors Corporation. 2 Figure 4. S&P AGGREGATE REVENUES & NOMINAL GNP 2 - - - - - -2-2 S&P Aggregate Revenues* (.1) Nominal GDP Goods (4.8) 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 - -2-2 * Revenues are derived by multiplying S&P revenues per share by the S&P divisor for each quarter. Source: Bureau of Economic Analysis and Standard & Poor s. Page 2 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
2 Figure. Revenues & Nominal GDP S&P AGGREGATE REVENUES & NOMINAL GNP 2 - - - - - -2-2 S&P Aggregate Revenues* (.1) Nominal GNP (4.3) 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 - -2-2 * Revenues are derived by multiplying S&P revenues per share by the S&P divisor for each quarter. Source: Bureau of Economic Analysis and Standard & Poor s. 2 Figure 6. S&P AGGREGATE REVENUES & NOMINAL GDP 2 - - - - - -2-2 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: Bureau of the Census and Standard & Poor s. S&P Aggregate Revenues* (.1) Nominal GDP Goods (4.8) - -2-2 Page 3 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
Revenues, World Production, & Exports 33 Figure 7. S&P REVENUES & WORLD INDUSTRIAL PRODUCTION & EXPORTS 14 3 29 World Industrial Production (2 = ) Sep 12 27 2 World Exports Volume (2=) 23 2 8 19 17 S&P Revenues (dollars per share, nsa) 6 4 13 1 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: Netherlands Bureau for Economic Policy Analysis and Standard & Poor s Corporation. 2 33 Figure 8. S&P REVENUES & WORLD EXPORTS 22 3 2 29 27 S&P Revenues (dollars per share, nsa) Aug 18 16 2 World Exports: Value (trillion dollars, 12-month sum) 14 23 2 12 19 17 8 6 13 4 1 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: International Monetary Fund (IMF) and Standard & Poor s Corporation. 2 Page 4 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
3 2 1 Figure 9. Revenues & Leading Indicators OECD LEADING INDICATORS vs. S&P REVENUES 3 2 99 98-97 96 9 94 OECD Leading Indicators (amplitude adjusted, nsa*) S&P Revenues Per Share 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2-2 -3-4 * A reading above that is rising predicts expansion, above and falling a downturn, below and falling a slowdown, and below and rising a recovery. Source: Standard & Poor s Corporation and Haver Analytics. 3 2 Figure. OECD LEADING INDICATORS vs. S&P REVENUES 2 2 1 99 98 97 96 9 94 US Leading Indicators (amplitude adjusted, nsa*) S&P Revenues 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 - - - -2-2 -3-3 -4-4 - * A reading above that is rising predicts expansion, above and falling a downturn, below and falling a slowdown, and below and rising a recovery. Source: Standard & Poor s Corporation and Haver Analytics. Page / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
Revenues & US Economic Indicators 33 Figure 11. S&P REVENUES & US COINCIDENT ECONOMIC INDICATORS 13 3 29 27 2 S&P Revenues (dollars per share, nsa) Coincident Economic Indicators (2 = ) 12 1 23 2 19 9 17 8 13 1 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: Standard & Poor s Corporation and Conference Board. 7 33 Figure 12. S&P REVENUES PER SHARE & US LEADING ECONOMIC INDICATORS 3 29 27 2 S&P Revenues (dollars per share, nsa) Leading Economic Indicators (2 = ) 14 13 12 23 2 1 19 17 9 13 8 1 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: Standard & Poor s and Conference Board. 7 Page 6 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
Revenues & US Business Sales 33 Figure 13. S&P REVENUES PER SHARE & US BUSINESS SALES 2 3 29 27 2 Business Sales* (trillion dollars, saar) S&P Revenues (dollars per share, nsa) 18 16 23 14 2 12 19 17 13 8 1 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 6 * Manufacturing and trade sales. Source: Census Bureau and Standard & Poor s. 2 2 Figure 14. S&P AGGREGATE REVENUES & US BUSINESS SALES 2 2 - - - - S&P Aggregate Revenues* (.1) Business Sales** (6.) - - -2-2 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2-2 -2 * Revenues are derived by multiplying S&P revenues per share by the S&P divisor for each quarter. ** Manufacturing and trade sales. Source: Census Bureau and Standard & Poor s. Page 7 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
2 Figure. Revenues & US Business Sales S&P AGGREGATE REVENUES & US BUSINESS SALES 2 - - S&P Ex Energy Aggregate Revenues* (4.1) Business Sales Ex Petroleum** (.6) - - - - -2 22 23 24 2 26 27 28 29 2 211 212 213 214 2 216 217 218 219-2 * S&P quarterly data, not per share. ** Manufacturing and trade sales. Source: Census Bureau and Standard & Poor s. Page 8 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
Revenues & US Factory Orders 32 3 Figure 16. S&P REVENUES & US MANUFACTURING ORDERS 7 6 27 6 2 22 2 4 17 4 S&P Revenues (dollars per share, nsa) 3 12 Total New Factory Orders (billion dollars, saar) 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: Standard & Poor s Corporation and Census Bureau. 3 2 3 2 Figure 17. S&P REVENUES & US MANUFACTURING ORDERS 3 2 - - -2-3 -4 S&P Revenues (using dollars per share) (6.1) Total New Factory Orders (3.7) 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: Standard & Poor s Corporation and Census Bureau. -2-3 -4 Page 9 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
3 Figure 18. Revenues & US Factory Shipments S&P REVENUES & US MANUFACTURING SHIPMENTS 6 3 6 2 4 2 4 S&P Revenues (dollars per share, nsa) Total New Factory Shipments (billion dollars, saar) 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: Standard & Poor s Corporation and Census Bureau. 3 3 2 2 Figure 19. S&P REVENUES & US MANUFACTURING SHIPMENTS 2 - - - - - -2 S&P Revenues (using dollars per share) - -2-2 -3 Total New Factory Shipments 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: Standard & Poor s Corporation and Census Bureau. -2-3 Page / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
Revenues & US Exports 32 3 27 2 Figure 2. S&P REVENUES & US MERCHANDISE EXPORTS S&P Revenues (dollars per share, nsa) US Merchandise Exports (billion dollars, saar) 17 13 22 1 2 9 17 7 12 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: Standard & Poor s Corporation and Census Bureau. 3 3 Figure 21. S&P REVENUES & US MERCHANDISE EXPORTS 3 2 2 - - -2-3 S&P Revenues (using dollars per share) US Merchandise Exports 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: Standard & Poor s Corporation and Census Bureau. -2-3 Page 11 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
2 Figure 22. Revenues & US PMIs S&P REVENUES & US PURCHASING MANAGERS SURVEY 6 Nov 6-4 - - -2-2 S&P Revenues (using dollars per share, yearly percent change) US Purchasing Managers Survey: Manufacturing PMI 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: Standard & Poor s and Institute for Supply Management. 4 3 3 2 Figure 23. S&P REVENUES & US PURCHASING MANAGERS SURVEY 7 6 Nov 6-4 - - S&P Revenues (using dollars per share, yearly percent change) 4 3-2 -2 US Purchasing Managers Survey: Nonmanufacturing PMI 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: Standard & Poor s Corporation and Institute Supply Management. 3 2 Page 12 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
Revenues, CRB, & TWD 7 Figure 24. S&P REVENUES & INDUSTRIAL COMMODITY PRICES 32 3 6 S&P Revenues (using dollars per share) CRB Raw Industrials Spot Price Index* 12/2 27 2 22 4 2 17 3 2 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 12 * Includes copper scrap, lead scrap, steel scrap, tin, zinc, burlap, cotton, print cloth, wool tops, hides, rosin, rubber, and tallow. Source: Standard & Poor s Corporation and Commodity Research Bureau. -16-14 -12 - -8-6 -4-2 2 4 6 8 12 14 16 18 2 Figure 2. S&P REVENUES PER SHARE & US TRADE-WEIGHTED DOLLAR JP Morgan Nominal Broad Effective Exchange Rate (inverted scale) (-.) S&P Revenues (using dollars per share) (6.1) 12/ 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 - - - -2-2 * Argentina, Australia, Brazil, Bulgaria, Canada, Chile, China, Colombia, Croatia, Czech Republic, Denmark, Ecuador, Egypt, France, Germany, Hong Kong, Hungary, Japan, India, Indonesia, Israel, Italy, Korea, Kuwait, Malaysia, Mexico, Morocco, New Zealand, Nigeria, Norway, Pakistan, Panama, Peru, Philippines, Poland, Romania, Russia Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom, Ukraine, Uruguay, Venezuela, Vietnam, and United States. Source: JP Morgan and Standard & Poor s. Page 13 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
Revenues & US GDP 18. 16. 14. Figure 26. S&P TOTAL REVENUES & US BUSINESS SALES (trillion dollars, saar, ratio scale) 18. 16. 14. 12. 12... 8. 8. 6. 6. 4. Business Sales* S&P Revenues** 4. 2. 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 2. * Manufacturing and trade sales. ** Revenues are derived by multiplying S&P revenues per share by the S&P divisor for each quarter. Source: Census Bureau and Standard & Poor s. 21 18 Figure 27. S&P TOTAL REVENUES & US NOMINAL GDP (trillion dollars, saar, ratio scale) 21 18 12 12 9 9 6 6 Nominal GDP S&P Total Revenues* 3 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 3 * Revenues are derived by multiplying S&P revenues per share by the S&P divisor for each quarter. Source: US Department of Commerce, Bureau of Economic Analysis, and Standard & Poors Corporation. Page 14 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
2 Figure 28. Revenues & US Tax Receipts S&P REVENUES & US FEDERAL TAX RECEIPTS 2 Nov - - - - -2-2 Federal Tax Receipts (using 12-month sum) S&P Revenues (using dollars per share) 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: US Department of Commerce, Bureau of the Census, Standard & Poor s Corporation and Treasury Department. - - -2-2 3 2 Figure 29. S&P REVENUES & US FEDERAL TAX RECEIPTS 3 2 2 2 Nov - - - -2-2 Federal Receipts: Individual Income Taxes (12-month sum) S&P Revenues (using dollars per share) 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 Source: US Department of Commerce, Bureau of the Census, Standard & Poor s Corporation and Treasury Department. - - - -2-2 Page / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
Revenues & Forward Earnings 33 3 Figure 3. S&P REVENUES & FORWARD EARNINGS 12/14 14 29 13 27 12 2 23 2 S&P Revenues (dollars per share, nsa) S&P Forward Earnings* 1 9 8 19 7 17 6 13 1 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2 4 3 * Time-weighted average of current and next years consensus estimates. Source: Thomson Reuters I/B/E/S and Standard & Poor s Corporation. 4 Figure 31. S&P REVENUES & FORWARD EARNINGS 2 2 12/14-2 S&P Revenues (using dollars per share) - -4 S&P Forward Earnings* 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 2-2 * Time-weighted average of current and next years consensus estimates. Source: Thomson Reuters I/B/E/S and Standard & Poor s Corporation. Page 16 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
Revenues: Industrial Composite 42 Figure 32. S&P & S&P INDUSTRIAL COMPOSITE SALES PER SHARE 42 37 S&P (38.) S&P Industrial Composite* (419.) 37 32 32 27 27 22 22 17 17 12 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 18 19 12 * S&P Industrial Composite excludes the S&P Transportation Composite and the S&P Financials and Utilities sectors. Source: Standard & Poor s Corporation and Thomson Reuters I/B/E/S. Page 17 / December 21, 217 / Stock Market Briefing: S&P Revenues & the Economy www.
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