17 May IMPRESSIVE EARNINGS SEASON

First quarter earnings season was excellent by almost any measure. The
numbers were strong even without the boost from the new tax law. In this week’s
commentary, we recap the outstanding near-complete first quarter earnings season,
highlight some of the key themes, and show why a potential peak in earnings growth
is not cause for immediate concern.

GREAT NUMBERS
We expected a strong first quarter earnings season and we got it. Growth was very
impressive, with S&P 500 Index earnings growing 26% year over year, the best
since the fourth quarter of 2010. Even when excluding the impact of the new tax law
(estimated at 6–7%), earnings growth accelerated from the prior quarter and approached
20%. A broad range of sectors produced substantial upside surprises [Figure 1].

View the full weekly market commentary here.

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