Description: We were told earlier this year that the earnings picture will start improving in the back-half of the year and the momentum will accelerate in 2016 and beyond. But now that we have reached the second half of the year and the Q3 earnings season is about take the spotlight, we see none of that improvement. If anything, the growth picture appears to have deteriorated under the combined effect of the strong U.S. dollar, weakness in the Energy sector and the uncertain global growth backdrop. 
 
Total earnings for the S&P 500  index are expected to be down -5.9% from the same period last year on -4.6% lower revenues, the second quarter in a row of negative earnings growth for the index. 
 
(Note: For a detailed look at the Q3 earnings season, please check our weekly Earnings Trends report)
 
The Energy sector is dragging down the aggregate growth pace, with total earnings for the Energy sector expected to be down -65.3% from the same period last year. Excluding the Energy sector, growth for the rest of the S&P 500 index would be modestly in the positive territory (up +1.4%). The Energy drag notwithstanding, there isn’t much growth beyond that space either. Finance is expected to have good quarter in Q3, with total earnings for the sector expected to be up +8.3% from the same period last year. But most of the Finance sector growth is due to easy comparisons at Bank of America (BAC – Analyst Report). Excluding Bank of America, the Finance sector’s growth is barely in the positive territory. Earnings for the Technology sector are expected to be up +2.5%, but the sector’s growth rate turns negative once Apple’s (AAPL – Analyst Report) strong growth numbers are excluded from the sector. There is genuine growth in the Medical, Construction, Autos and Transportation sectors, but overall the picture isn’t very inspiring.