CNBC Summarize:
* Experts are debating whether earnings have hit a peak.
* Tax cut prospects are set to add fuel to the earnings growth story.
* Citigroup estimates each 1 percent cut in corporate taxes will generate roughly $2 in earnings per share.
We haven't even started third-quarter earnings season, and already the debate focuses on what could be called peak earnings.
Here's what's going on:
Earnings have been growing through 2017, after a six-quarter period in 2015 and 2016 of negative earnings. Not surprisingly, this was a period when the market traded sideways or down.
Earnings are still growing in the third quarter, but at a slightly slower rate. Overall earnings for the S&P 500 are expected to grow 6.2 percent, a bit slower than the 15.3 percent in the first quarter and 12.3 percent in the second quarter.
Why the slowdown? Some of the sectors that had big moves higher are hitting tougher comparisons, principally energy and tech stocks. Energy, for example, bottomed in the second quarter of last year and had a huge boost in the second quarter of this year, so the comparisons are tougher.
But overall earnings are still increasing and will likely stay on that path into 2018.
The economy is continuing to grow, and earnings estimates are still growing. Citigroup's chief U.S. equity strategist, Tobias Levkovich, is among many strategists who are optimistic on economic growth and believe we are not at peak earnings.
Reference: CNBC
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