The S&P 500’s first quarter 2022 EPS growth estimate continues to see upward revisions; as of April 28, 2022, S&P Capital IQ consensus estimates project Y/Y Q1 growth of 7.8%, versus the 4.9% forecast as of 3/31/22, observes Sam Stovall, chief investment strategist for CFRA Research in the firm's flagship newsletter, The Outlook.

What’s more, 10 of 11 sectors have seen increases in estimates, led by energy, materials, and real estate. Only the industrials sector has seen a forecast reduction. Full-year 2022 estimates have improved as well, with the S&P 500 EPS now likely to see a 9.1% increase this year, versus the initial estimate of 7.7%.

Normally, the S&P 500 performs fairly well in May, gaining 0.7% since 1990, accompanied by gains for all sizes and styles along with 10 of 11 sectors, led by consumer staples, health care, and tech, while communication services, energy, and real estate have underperformed.

In addition, three-fourths of the S&P 1500’s sub-industries in existence for at least 19 years posted advances in May. One reason May has done relatively well might be that it leverages April’s reputation for being the month with the highest average price gain since WWII.

This year, however, the S&P Composite 1500 fell 7.6% month-to-date through April 27, along with all sizes, styles, and 10 of its 11 sectors. What’s more, 77% of the 1500’s 148 sub-industries declined.

Not surprisingly, volatility remains elevated. Since the start of the year, the S&P 500 has recorded 40 days with 1% or more closing price moves, totaling nearly 2.5 times the year-to-date (YTD) average since 1945.

The S&P 500’s 12.2% YTD decline is the deepest selloff since WWII, and history says, but does not guarantee, that the market may continue to be challenged, since the S&P 500 rose only 30% of the time in May following the 10 worst YTD-April declines.

Representative companies from this list of best S&P 1500 sub-industries in May are: Electronic Arts (EA), Philip Morris Int’l. (PM), Waste Management (WM), UnitedHealth Group (UNH), Dentsply Sirona (XRAY), Amazon (AMZN), Monster Beverage (MNST) and Patterson Cos. (PDCO).

Subscribe to CFRA Research's The Outlook here…