S&P 500 Earnings to Surprise on Upside: Gartman
Staff Writer, CNBC.com
The upcoming U.S. earnings season is likely to be better than expected for major U.S. corporates, investor and strategist Dennis Gartman told CNBC Tuesday.
“Are we going to see 5-10 percent growth in earnings by almost all of the S&P 500 ? Probably,” Gartman, the author of The Gartman Letter, said.
He believes that current predictions of up to 2 percent growth in numbers are “probably a bit on the downside.” Earnings for the last quarter of 2011 surprised investors by being better than expected, with 63 percent of S&P 500 companies beating earnings estimates.
Earnings in the index surged by 19 percent in the first quarter of 2011.
“We are not going to replicate 19 percent for a long time,” Gartman said. He added that aluminium company Alcoa’s numbers, expected later Tuesday, are “probably” going to be horrible.
Weaker-than-expected U.S. jobs figures on Friday sent stock markets down Monday, in one of the year’s lowest-volume trading days to date.
“Everybody got this one wrong,” Gartman said, admitting he missed the number by a “large amount.”
He added that the response was an “over-reaction” because of the long Easter weekend.
“We are adding jobs, a smaller number than hoped. When the next numbers come out, hopefully we will see this month’s revised upwards,” he said.