The energy sector has had the largest earnings drop over the past 6 months.
The S&P is expected to grow earnings 4.2% in 2015, contracting in the first half and picking up in the second half. This is the slowest growth in earnings since the Q4 2011 to Q3 2012. The major difference is valuation. During 2011 -2012 the S&P had a forward pe ratio in the 11x - 13x area. Today with such a high valuation, the low level of earnings growth could trigger a market correction.
After energy, what sectors have the weakest earnings growth expectations for 2015 versus 2014: utilities +1.4%, staples +2.9%, and financials +3.7%. What sectors have the highest 2015 earnings growth expectations: health care +23.3%, tech +16.4%, materials +9.4%, discretionary +8.3%, and industrials +8.2%.
How about valuation: