Q4-2014 S&P 500 earnings growth was sluggish at 3.7% YoY – a significant slowdown from around 8% growth in Q2 and Q3. The Energy sector was primarily responsible for lower earnings due to the drop in oil price. Earnings grew by 5% for the full year 2014.

Looking ahead, according to Factset, earnings are expected to fall by 4% YoY in Q1. The Energy sector is responsible for the bulk of this loss – earnings for the sector are expected to decline by over 60% in Q1 compared with the same quarter last year. Analysts expect all other sectors to report positive growth for calendar year 2015, but earnings growth for the S&P 500 overall is expected to slow down even further to 3% in 2015.

Model Capital Management LLC is a tactical investment manager. Please review the following pages for more information on Model Capital’s approach to tactical investment management and our tactical SMA strategies.