In a world in which everything is up if only one excludes all the things that are down, a favorite pastime of “strategists” has become announcing how high S&P500 earnings would be if only one excluded energy companies… and the impact of the dollar… and China’s economic slowdown… and the Emerging Markets currency crisis… and the [cold|hot|just right] weather… and rising labor costs… and everything else that stands between revenue (non-GAAP of course, just ask Tesla) and the bottom line.
What if one does the inverse: what if instead of eliminating the worst performing sectors (and all other factors that detract from performance in a priced to centrally-planned perfection world) one eliminates the biggest company in the world, Apple?
The result is troubling. As can be seen in the chart below, when it comes to second quarter earnings, Apple made all the difference in the world, literally, between gains and losses for what was otherwise one of the “best” performing sectors. In fact, AAPL provided a whopping 6% swing in IT sector EPS for Q2, pushing them from down 1.5% Y/Y without AAPL to 4.4% with AAPL.
This post was published at Zero Hedge on 09/14/2015.
Follow on Twitter
Recent Comments