analysing the market sans-Apple is becoming a more and more popular sport on Wall Street.
A new report from Barclays’ Barry Knap adds to the body of literature, looking at S&P earnings sans-Apple:
As we head into 1Q12 earnings season, much like last quarter, AAPL is expected to have another sizable effect on index earnings and margins, masking otherwise less-than-stellar trends. Earnings growth is estimated at just 1.4% y/y, and about zero excluding AAPL. It seems likely that results will wind up somewhat better than expected, given a post-recession median positive surprise ratio of ~70%. However, even tacking on last quarter’s ex-AAPL earnings surprise of 230bp, this quarter is setting up for 2% y/y growth, which would make this the worst growth rate since the recovery began.
This is another interesting chart from Knapp: It looks at the number of stocks at any given period making an outsize contribution to the S&P 500 over a 3-month period.
As you can see, right now, only one stock (Apple) has contributed more than 10% (or even 5%) to the rally over the last 3 months.
Compare that to 1999 and 2000, a period characterised by several fast-growing mega-corporations, when several stocks were making big contributions.
As for the above point about earnings, the situation is even worse if you just look at the tech sector, where earnings sans-Apple are actually shrinking.