Standard and Poor's recently released preliminary 4th Quarter 2008 SP-500
earnings. As most of you no doubt have read it was the first negative
earnings quarter in S&P history. With over 93% of all 500 companies
reporting, the 4th quarter earnings are -$11.97. For the year reported
earnings are $26.16 compared to $45.95 for the previous 4 quarters (12/31/07
to 9/30/08). This in effect jumped the S&P's PE up from 17.99 for
the week ending 1/13/09 to its current PE of 29.24 (S&P's close of 764.90
/ $26.16). However, according to S&P's estimates the 4-quarter
earnings for the next 4 periods will be:
3/31/09 - $18.48
6/30/09 -
$14.37
9/30/09 - $12.62
12/31/09 - $32.41
Demonstrating all this
are two attached S&P PE charts - one for 1939 to present and the other
1985 to present.
Last time the S&P had earning below $19, the
S&P index was below 420. On the other hand, back in June 2002 the
S&P had earnings of $30.32 and the S&P stood at 989.81.