Excess Returns · Monday, September 14, 2026
Jim Paulsen breaks down earnings per share, noting that while the technology and telecommunications sectors (the 'brany-ack earnings') are performing exceptionally well, other sectors tied to commodities and the remaining seven S&P sectors are showing much weaker growth. He highlights that averaging these disparate results can mask underlying economic weaknesses.
“But below that surface, it's really a, uh, uh, two-pronged, almost three-pronged story on earnings. And that's what this chart brings out. What I got here is forward 12-month earnings per share for the blue line is for the technology and telecommunications sector, kind of new era. Which I call the, uh, the brany-ack earnings, you know, earnings that come from somebody really came up with something cool. Um, and they're just going, gun busters, which everyone knows.”
“And, but, if you look at S&P overall, you average it, hey, we're doing great. And that's why I'm saying, I think, I think we need to separate these stories because if, if I'm a policy official, and I could do it, I'd be tightening on the blue and I'd be easing on the red. The problem is, we don't have policies like that. Not a gear, macro policies.”