S&P 500 Forward Earnings & the Economy

1 S&P 500. Forward Earnings &. the Economy Yardeni Research, Inc. January 18, 2022. Dr. Edward Yardeni 516-972-7683. Joe Abbott 732-497-5306. Mali Quintana 480-664-1333. Please visit our sites at thinking outside the box Table Of Contents Table Of Contents S&P 500 Earnings Squiggles 3. S&P 500 Forward & Operating Earnings 4. OECD Production & Exports 5. US Leading & Coincident Indicators 6. US Production & Business Sales 7. US Employment 8. US Orders & Shipments 9. US Capital Spending 10. US Exports & the Dollar 11. Prices 12. US Managers Indexes 13. January 18, 2022 / S&P 500 Forward Earnings & the Economy Yardeni Research, Inc. S&P 500 Earnings Squiggles Figure 1. 230. 210 230. 210 21 Q3 210. 190 S&P 500 OPERATING Earnings PER SHARE 20.

2 190. 170. (consensus analysts' estimates in dollars, monthly, ratio scale) 19 190. 170 170. 150 18. 150 17 150. 130 15 16. 130 14 130. 13. 110. 110 09 12 110. 08. 90 07 11. 90 90. 10. 06. 70 05. 70 01 02 70. 03. 04 Analysts' Estimates 00. 99. Annual*. 50 98. 50 12-month Forward ** 50. 97 Actual 4Q sum**. 96. 95. 30 30. 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24. * "Squiggles" span 25 months from February to February. ** Time-weighted average of consensus operating Earnings estimates for current and next years. ** Actual 4Q sum from I/B/E/S data by Refinitiv. Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Source: I/B/E/S data by Refinitiv.

3 Figure 2. 210 210. 170. S&P 500 OPERATING Earnings PER SHARE 170. (consensus analysts' estimates in dollars, monthly, ratio scale). 130 130. 90 90. 50 50. 95. 94. 91 92 93. 90. 89. 85 86 87 88. 82 83 Analysts' Estimates 84. 81 Annual*. 80 12-month Forward **. Actual 4Q sum**. 10 10. 1979 1983 1987 1991 1995 1999 2003 2007 2011 2015 2019. * "Squiggles" span 25 months from February to February. ** Time-weighted average of consensus operating Earnings estimates for current and next years. ** Actual 4Q sum from S&P until Q4-1993 then I/B/E/S data thereafter. Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Source: I/B/E/S data by Refinitiv. Page 3 / January 18, 2022 / S&P 500 Forward Earnings & the Economy Yardeni Research, Inc.

4 S&P 500 Forward & Operating Earnings Figure 3. 250 250. 1/13. 210 S&P 500 OPERATING Earnings PER SHARE: Forward & ACTUAL Q3. 210. (I/B/E/S data by Refinitiv). 170 (dollars per share, ratio scale) 170. 130 130. 90 90. 50 50. S&P 500 Earnings Per Share Forward * ( ). Operating** (4Q sum) ( ). 10 10. 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24. * Time-weighted average of consensus operating Earnings estimates for current and next year. Monthly through March 1994, then weekly. ** From S&P until Q4-1993, then from I/B/E/S data by Refinitiv. Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: I/B/E/S data by Refinitiv.

5 Figure 4. 250 250. S&P 500 OPERATING Earnings PER SHARE: Forward & ACTUAL 1/12. 210 210. (I/B/E/S data by Refinitiv) Q3. 170 (dollars per share, ratio scale) 170. 130 130. 90 90. 50 50. Earnings Per Share Operating Earnings (4Q sum) ( ). Forward Earnings *. (pushed 52-weeks ahead). ( ). 10 10. 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25. * Time-weighted average of consensus estimates for current year and next year. Monthly through December 2005, then weekly. Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: Standard & Poor's until Q4-1993, then I/B/E/S data by Refinitiv. Page 4 / January 18, 2022 / S&P 500 Forward Earnings & the Economy Yardeni Research, Inc.

6 OECD Production & Exports Figure 5. 50 50. S&P 500 Forward Earnings & INDUSTRIAL PRODUCTION. 40. (yearly percent change) 40. 1/13. 30 30. 20 20. 10 10. Sep 0 0. -10 -10. -20 Forward Earnings * -20. Industrial Production: OECD. (2015=100). -30 -30. -40 -40. 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25. * Time-weighted average of consensus operating Earnings estimates for current and next year. Monthly through March 1994, weekly thereafter. Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: Haver Analytics, International Monetary Fund (IMF), and I/B/E/S data by Refinitiv. Figure 6. 75 75. S&P 500 Forward Earnings & WORLD EXPORTS. (yearly percent change).

7 50 50. 1/13. 25 25. 0 Jul 0. -25 World Exports Value ( ) -25. Forward Earnings * ( ). -50 -50. 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25. * Time-weighted average of consensus operating Earnings estimates for current and next year. Monthly through March 1994, weekly thereafter. Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: Haver Analytics, International Monetary Fund (IMF), and I/B/E/S data by Refinitiv. Page 5 / January 18, 2022 / S&P 500 Forward Earnings & the Economy Yardeni Research, Inc. US Leading & Coincident Indicators Figure 7. 50 50. S&P Forward Earnings & LEADING ECONOMIC INDICATORS. 40. (yearly percent change) 40. 1/13. 30 30. 20 20.

8 10 Nov 10. 0 0. -10 -10. -20 -20. Forward Earnings *. -30. US Leading Economic Indicators -30. -40 -40. 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24. * Time-weighted average of consensus operating Earnings estimates for current and next year. Monthly through March 1994, weekly thereafter. Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: I/B/E/S data by Refinitiv and conference Board. Figure 8. 15 60. S&P Forward Earnings & COINCIDENT ECONOMIC INDICATORS. (yearly percent change). 10 40. 1/13. 5 20. Nov 0 0. -5 Forward Earnings * -20. US Coincident -10 Economic Indicators -40. -15 -60. 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24.

9 * Time-weighted average of consensus operating Earnings estimates for current and next year. Monthly through March 1994, weekly thereafter. Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: I/B/E/S data by Refinitiv and conference Board. Page 6 / January 18, 2022 / S&P 500 Forward Earnings & the Economy Yardeni Research, Inc. US Production & Business Sales Figure 9. 20 50. S&P Forward Earnings & INDUSTRIAL PRODUCTION. (yearly percent change) 40. 15. 1/13. 30. 10. Apr 20. 5. Dec 10. 0 0. -10. -5. Forward Earnings * -20. -10. US Industrial Production -30. -15. -40. -20 -50. 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24. * Time-weighted average of consensus operating Earnings estimates for current and next year.

10 Monthly through March 1994, weekly thereafter. Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: I/B/E/S data by Refinitiv and Board of Governors of the Federal Reserve System. Figure 10. 45 90. 40. S&P Forward Earnings & BUSINESS SALES 80. (yearly percent change). 35 70. 30 60. Forward Earnings *. 25 50. 20 US Business Sales** 40. Nov 1/13. 15 30. 10 20. 5 10. 0 0. -5 -10. -10 -20. -15 -30. -20 -40. -25 -50. 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24. * Time-weighted average of consensus operating Earnings estimates for current and next year. Monthly through March 1994, weekly thereafter. ** Manufacturing and trade sales. Note: Shaded areas are recessions according to the National Bureau of Economic Research.