Although spring is not generally the season to be jolly, most investors are hoping it will be this year. Over the course of the next three weeks, 315 companies or 63% of the S&P 500 are expected to report earnings. Going into Q1 earnings season, the 2010 earnings estimates is $78.12, indicating that as of Friday’s close, the S&P 500 is trading 15.3x expected earnings. That is a very slight discount to the historic long term multiple of 15.9x. Curren<\/span>t 2011 estimates are an aggressive $93.55<\/span><\/strong><\/span>.<\/span> <\/p>\n How aggressive is that?<\/p>\n If the $78 number is achieved, S&P 500 earnings will need to grow 20% year over year to achieve the 2011 estimate<\/strong><\/span>. Even just 6 months ago, we would have been enthused to have the confidence to believe $78 for 2010 could be a done deal. Likewise, without even having Q1 2010 earnings in the books, 2011’s $93 are a long way away. T<\/span>o put these numbers in perspective, peak earnings were registered in 2006 at $87.72, followed by $82.54 in 2007 and $49.51 in 2008<\/strong><\/span>. Last year’s earnings were $56.86. As it stands now, 2010’s $78 is looking pretty good. The broad economy appears to be entering a sweet spot from a sentiment perspective which will likely provide enough momentum to keep the recovery on or ahead of schedule over the next 6 months.<\/p>\n 20% over a snapback year would be pretty startling, and the idea of earnings surpassing 2007 is equally amazing.<\/p>\n We’ll come back to this subject a lot, we imagine, over the next several weeks (and of course the coming quarters). But we thought this was a nice taste of what the market is expecting right now.<\/p>\n