Let’s talk about the Earnings Season wrapping up in this Weekly Update with Brett Witkowski!

Despite all the noise in the news, stocks are still valued based on earnings. We’re about 80% through earnings season—76% of S&P 500 companies have reported a positive EPS, and 62% have reported positive revenue. Both earnings growth and guidance have been strong.

One concern is valuation. The forward 12-month P/E ratio for the S&P 500 is 22.2, which is above the 5-year average (19.8) and the 10-year average (18.3). We need to be careful that the market doesn’t get ahead of itself.

Looking at Q4 2024 earnings, healthcare, IT, communication services, and financials have shown strength, while real estate, utilities, materials, and consumer staples have been impacted by inflation and interest rates.

Overall, Q4 earnings were strong, and expectations for 2025 are solid. CEOs are being rational with their guidance, and while the economy has hit a soft patch, there’s hope for improvement over the next year.