118 - The FAANG Illusion: What Earnings Season Really Shows

Q2 2025 earnings season looks like a win on paper—81% of S&P 500 companies beat expectations—but don’t be fooled. The market’s strength is overly reliant on FAANG stocks (GOOG, META, AMZN, AAPL, MSFT) pulling the averages higher, while tariffs and lowered guidance have made “surprises” look better than they really are.

In this episode, we cut through the noise:

• 📊 Why Tech & Communications are carrying the market
• 🩺 Healthcare & Financials show quiet resilience
• 🛢️ Energy & Materials are dragging—and why it matters
• ⚠️ How tariffs, experts, and news distort earnings expectations and market psychology
• 🧭 What the data is really signaling about Q3 and how to tweak portfolios now

If you’re building an income-driven strategy or just trying to see where the next cracks—or opportunities—might show up, this is a must-listen. We’re not waiting for the headlines to tell us the story.

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**DISCLAIMER**
Ticker metrics change as markets and companies change, so always do your own research. The content in this podcast is based on personal experience and is for educational purposes, not financial advice. See full disclaimer here.

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Transcript

Welcome to roaming returns a podcast about generating a passive income with dividend stocks so you can secure your finances and liberate your life. 

Everyone’s talking about how strong this market looks right now—but is it really that strong? The truth is, it’s a handful of mega-cap tech names—Apple, Microsoft, Google, Amazon, Meta—dragging the indexes higher while tariffs and soft earnings bars mask what’s really happening. Today, we’re breaking down Q2 earnings season across all sectors, separating the hype from reality, and figuring out how to position our portfolios for the next quarter.

What's up, all? It is, uh-oh. What just happened? You just yawned your face off. I just yawned.
That was a terrible intro. Terrible intro. What's up, all? It's time for quarter two data dump.
Data dump. Now, what does that mean? Well, I took, I ran my quarterly report that tabulates the S&P 500's earnings reports as a conglomerate, not individual companies. Because last week we did some of the earnings reports of the individual companies, if you remember.
Yes, we did. And this week we're just going to do S&P as a whole because it actually will provide us with... Pertinent information for macro and how the climate is shifting, correct? Yes. Which is super important, not just our portfolio specific.
We need to know the whole picture in case we need to flip anything out, bring anything in. There are, like, when we get to the end, like, what's projected to be good for the next quarter. Like, there might be some portfolio editing that needs to occur.
Might be? Yeah. Not on our end, but, like, the other people. Oh, I thought you were, like, question, question.
I was, like, way to fucking, like, make people chomp at the bit for that. You're, like, eh, maybe. If you're on the email, you get our, right away, whenever we do something.
You know when he has thought bubbles, like such. So if you... Okay. Whenever you do, like, whenever you pull, like, a report for the earnings, like, earnings, they just talk about earnings.
But that actually is the earnings per share, just so, like, to clarify that up front. Like, EPS is what they mean when they mean, like, earnings. So, you know.
Oh, I did not know that. And as of the time that I pulled this, that was last Friday. 90% of the S&P had reported their quarter 2 earnings.
And 81% of the S&P 500 companies had a positive EPS surprise. Now, that doesn't mean they had a positive EPS. That was that they were projected.
I think the companies were actually very conservative. No, the people, like, the experts, the analysts, like, they just had a very, very... Conservative? Yeah, conservative average. Because they didn't want people to panic, right? They're trying to keep people from panicking.
So they're underestimating what's going to happen. They're trying to keep people in the market. Yes.
They're trying to underestimate what they think is actually going to happen. So that when we have these, quote, unquote, earnings surprises. So, like, it says a positive earnings surprise, but that's not necessarily saying, hey, they were supposed to have $0.05 per share, but they got $0.10 per share.
Like, that could also mean they were supposed to have negative $0.30 per share, and they got, like, a negative $0.27 per share. So a positive earnings surprise, it sounds better than it is. Yes.
Again, it's very subjective. You've got to look at the actual numbers. And the same thing, it was the exact same.
It was 81% of the S&P 500 had reported a positive revenue surprise as well. And that's the exact same way, like, you had to look at where the starting point is, like, where the analysts predicted. So if things would have been good overall, we'd be, like, clapping and shouting about this.
But this is, like, misleading. So it is misleading. But, like, now this next point here is actually pretty important.
For the quarter 2, 2025, the year-over-year earnings growth rate was 11.8% for the companies that reported. That means from 2024 to 2025, they had almost a 12% EPS growth. So if you correlate that with the 81%.
Now, is that the market as a whole or is that just, like? It's the S&P 500. Okay. That all the companies, like I said, 90% of the S&Ps reported.
So it's 90% of the S&P. So is this mainly on S&Ps? It's all on S&P. Okay.
Because that's, like, the majority of companies worthwhile. But, like, the easiest report to pull is on S&P. Oh, you lazy.
Lazy people. But, like, when we went over this before, like, you can garner a lot of macro trends just using S&P reports. So that's what we do.
So if it's the easiest to get the picture, to get the pattern, that's what we do. So if the 11.8% is the actual growth rate after the last 10% of the companies actually reported, it will make the third consecutive quarter of double-digit earnings growth for the S&P index, which is pretty impressive given the climate because the policies are all over the place. So, like, the fact that it had double-digit.
Then inaccurate companies are the reporting earnings that are 8.4% above estimates. Again, the estimate is where the analysts have the anchor point. Like, 8.4% could be a good thing or it could be a bad thing, whatever.
But that's below the five-year average of 9.1% and it's above the 10-year average of 6.9%. So it's an average earnings, I think, other than the EPS growth, which is the three consecutive quarters of EPS growth at double-digit rates is pretty good. Nine, if you don't know in the index, there's 11 sectors. I don't know them off the top of my head.
I mean, I do. I always get so confused on these. There's 11 sectors and nine of the 11 sectors, they have reported a year-over-year growth in earnings led by other communication services.
Communication has been kicking ass the last, like, two years. That's including, like, Sterling and crap, right? Yeah, that's, like, communicated. Because of those massive upgrades they're doing.
It's phones and it's TVs and stuff like that. IT is the second one. And the surprising one was the financials.
Really? Because IT and communication had just been whipping ass for, like, forever. Tech and communication totally makes sense. Financials is interesting because, I mean, it makes sense if you think about it because interest rates are elevated, so they're getting more money.
Like, I literally just looked at this and I was disgusted. I forget what bank I was looking at. They basically get their interest rate at whatever it is, like 5.5 or whatever the rate is, 6.5. I don't know what the bank rate is.
Oh, what bank was it? It was some random obscure bank you were talking about. And they mark up their lending out money by 1.75% interest. Like, that's it.
That's hardcore. So, if they get a 5% rate, they're marking it out at 6.75. So, if it's 6.5, it's going to be 8.2. That's how they make their money. They keep that 1.75 buffer there.
So, that kind of makes sense. That's tiny, though, right? I would imagine most companies, like, hike it up way more than that. But it makes sense why financials would appear.
Because last time we did this, financials was struggling. So, it makes sense why financials would all of a sudden appear as one of the leading sectors. Two sectors reported a year-over-year decline in earnings, or EPS.
That was energy, which should come as no surprise. And the other one, in case you're wondering, is the materials sector. But materials was kind of interesting from the whole that you think they'd be making more money because it costs more for them.
They're selling things for more. But because of the tariffs, they're actually not making more money. So, the price's difference between what they're selling is higher, but they're actually paying a higher import fee.
So, that would kind of make sense. At the sector level, the IT, the information technology sector, 92%, and the financial sector, 87%, have the highest percentage of companies reporting earnings above estimates. While the materials only had 52% of the sector, was the lowest percentage of companies reporting earnings above estimates.
So, materials was last. Even though energy actually had a worse quarter, materials had the least amount of companies reporting earnings above estimates. Again, that's why we keep saying that estimates aren't all they're cracked up to be because earnings is by far the worst sector of the 11, but materials looks worse.
Earnings is the worst section? Energy. Energy. I think you said that wrong.
Okay. They know what I mean. Hopefully.
The consumer discretionary sector is reporting the largest positive difference between actual earnings and estimate earnings at 14.3%. Within that sector, you had Hasbro, who kicked ass, Las Vegas Sands, who kicked ass, DoorDash, who did really well, Carnival, Decker Brands, MGM Resorts, and Amazon. They all did really well with their earnings EPS surprises. So, there's a few companies in the consumer discretionary.
MGM Resorts. I don't really think Las Vegas Sands and I don't know any other ones. There's a lot of casinos in there.
That I would be interested in because of the dividend component. Whereas the communications services sector was 12.2% of the companies with the difference between actual earnings and estimated earnings. So, it's a little bit below the consumer discretionary, but not by much.
In this sector, Warner Brothers had a really good earnings EPS report. And this is what we're talking about. The estimate for Warner Brothers' discovery was negative 24 cents and their actual earnings per share came in at 63.
But because the bar was so low, it looks like that's what we're saying. Because the analysts have a low bar, the 81% is eh. EA had a decent EPS one.
Take-Two Interactive was pretty good. Interpublic Group of Companies. I don't even know what the hell that is.
Interpublic Group of Companies. Fox had a decent one. Paramount Skydance is one to watch because they literally just closed an $8 billion thing.
Deal? That was in the news. Paramount bought Skydance. That's why it says Paramount Skydance because it used to be Paramount.
What the hell is Skydance? It's a streaming service. I've never heard of it. I'm curious.
Continue on. I'm going to look this up. And Meta Platforms just crushed their earnings.
Their earnings came in at 714 and they were projected at 588. Meta had a really good earnings report if you're interested in companies that did really well in quarter two. The third largest positive difference between earnings and estimate earnings was in the financials.
We mentioned why the financials actually is doing so well this quarter because interest rates are so elevated and they have to get their cut. In this one, Coinbase just crushed their earnings. Coinbase Global had an estimated EPS of 119 and it actually came in at 514.
And that's why I think the Cony experiment, if you've been following along the Kony experiment, is going to get better because that's a ridiculous difference between the actual EPS and estimated EPS. Allstate did okay. Travelers did okay.
Cincinnati Financial, Synchrony Financial, and Capital One, they all did okay. But Coinbase was by far and away. By far and away? By far and away.
By far and away. That was the best earnings report surprise this quarter. Capital One.
Dang. Okay. So that's financials.
Okay. Hold on. We're going to backtrack for a hot second because I'm sure you're all curious about what the hell Skydance is.
So for those of you who are sports nuts and maybe video game people, you might be part of this whole thingy-jiggy. But they are primarily focused in high-quality event-level entertainment for global audiences. So they first launched with films, television, animation, games, and sports.
So I imagine they do more of the sportsy type stuff. But it's streaming. It's a streaming service.
It's a streaming service. Sports is huge. Games is huge.
But Paramount, if you recall, Paramount basically had to – there was a big fluff on the interweb that Paramount basically canceled Stephen Colbert because he pissed off the Overlord. And then the next day or the two days after that, they bought Skydance for like $8 billion. So that's one to watch because I – Reasons.
Just reasons. I don't know if it's going to be good or not. The material sector was the one that – we said that was the one that was the weakest when it came to EPS, actual earnings versus estimate earnings.
And within that sector, there was Dow that just sucked. Smurf? Does that say Smurf? Smurfett. What the fuck? Westrock.
Smurfett Westrock. I wish my name was Smurfett. But Smurfett Westrock had a really loud – I've never even heard of that.
But they had an actual negative 0.5. If I would have known that, our background thing right now would have been a Smurf, not an alien. Their estimated EPS was at 59 cents. So they really sucked.
IP, which I don't know if a lot of you know, they actually pay a dividend. I thought about getting an IP. It's international paper and it's like all thing paper.
But they had a pretty bad quarter as well. Mosaic, we actually drove by – there was a time when we did paper trading that we actually drove by a mosaic plant. I think it was in – What the hell is mosaic? I think it's like – Shall we look this up yet again? Like potash or something like that.
Potash. But we actually drove by a mosaic plant on the side of the road. I think it was in Virginia.
It might have been West Virginia. And I was like, oh my God, we have that in our paper account. This is before we actually started to do any serious trading.
Another one that had a really piss poor earnings one is one that we actually went over last week that we hold. It's just the Londell Bezel Industries. It is potash.
They're the ones that do chemicals. They mine, produce and distribute millions of tons of high quality potash and phosphates each year. Without fertilizers, the world would do something.
It cut off. Look at that. I actually know what I'm talking about.
I know. Occasionally, he actually remembers accurately. Who would have thunk it? That's interesting.
Potash. Potash. Is it potash? How do you even pronounce it? I call it potash, but I think it's potash.
Is it potash? I think it's potash. Revenues. To me, the EPS is one thing.
To me, the earnings per share can be manipulated and they can do creative accounting and all that shit. I actually like the actual revenue component. It's what they brought in.
In terms of revenue, 81% of companies have reported actual revenues above estimated revenues. Is that the same number as the other one? I'm reiterating. 0% had actual revenues equal to the estimate, and 19% actually reported revenues below the estimated revenues.
The percentage of companies reporting revenues above estimates is above the one-year average, above the five-year average, and above the 10-year average. It was a really good quarter for revenue from the different sectors. That's really interesting.
We've done four or five of these, and I've never seen where they were above the one-year. That's crazy. That's crazy because, again, this is data that's like the datum is put so freaking low that, yeah, we can break that.
That's like saying, hey, if I exercise for five minutes, beating it by the six-minute line is freaking hot shit. On the sector-level IT, this is, I guess, important. 96% of the IT companies that report earnings actually surpass their estimates on their revenue.
95% of the healthcare companies surpass their revenue estimates. 91% of the communication services. Again, you have IT and communication kicking ass like they've been doing for quarters now.
At the sector-level, utilities, information technology, consumer discretion, and healthcare sectors are reporting the largest positive differences between actual revenue and estimated revenue. The utilities is on there, but that actually, I thought it was a surprise until I actually thought about it because utilities are ramping up to produce more energy for AI and consumer consumption. That one actually, I believe.
That one makes a lot of sense to me. Information tech, again, same deal. Consumer discretionary? Consumer discretionary, I don't know.
Do you think that number encompasses what we talked about before with people buying stuff before tariffs would hit? Possibly. I think that's very possible that that's why that's happening. And the healthcare because people are getting older.
Again, I keep beating on that. I've been beating on that drum since we invested in MPW. It didn't turn out as well as I wanted to.
But healthcare is a very good sector to get into because there are like 12,000 boomers retiring every day. Tons. And they're going to go on healthcare at some point, go to the hospital.
So, like, healthcare is a really big macro trend that isn't fully addressed by, like, the experts. I don't know why. I also think a lot more people are coming down with weird shit.
So, like, healthcare in general is going up. Because it's not so mainstream yet, you can get pretty good deals on healthcare rates because it actually hasn't came to pass. So, I'm a couple years ahead of the curve on this one.
And this is something we definitely want to talk about. I want to take a pause right now. Tim's biggest problem is being, like, I swear to God, four years ahead of the curve.
Maybe sometimes less, but it seems to be a thing. Intel. Let's bring Intel up right here.
Oh, Intel, yeah. So, normally when news and media comes out and says something about a specific company, it's already in the price. Yeah, we talked about Intel, if you recall, last year.
I said Intel is, like, super undervalued. They make too much money for their current trading price. And they just started talking about it.
And what was the price gap between when we bought it and right now? Out of curiosity. 30-some percent. 30%, guys.
I don't know. The last I looked, it was, like, 33%. I was actually thinking about selling it because I don't really care.
Well, you get out when people are getting in. But, like, you don't know Intel. Like, the Overlord is going to, actually.
He's thinking about spending government money to invest in Intel. Oh, yeah, that was the comment, wasn't it? That Trump's thinking about getting into it. And then I just saw it.
I just read before we sat down to do this. I think SoftBank is investing $2 billion in Intel. So, Intel is going to be worse.
So, those two big news, you can probably still get a big up with, like, the sheeple that are not buying. Probably get, like, 15% more from where it's currently at until it actually starts producing results. And then it shows up on the financial streets.
We out. With our profits. But this is what we're saying.
Like, once they start talking about this stuff, it's already priced into the price. So, if Tim says something and he's way ahead of the crowd, pay the fuck attention. We have so much evidence.
Yeah. Yeah. Okay.
So, let's go here down. If you go in the information technology sector, the positive revenue surprises reported by Apple, which was $94 billion versus the $89.6 billion. And Microsoft, which was $76.4 billion versus $73.96 billion.
They've actually, like, they're basically carrying the information technology. Market. Like, the market is so skewed or saturated.
Just those two companies have moved the analyst's projection for the information technology revenue for the quarter three by 3%. That's crazy. So, that's just those two companies.
That's kind of like if you've ever heard about stocks and stuff. Like, when whales get in, it really pushes the price because they're investing so much that it's causing the whole thing to move super quick. Like, the same concept here.
And then the exact same thing is happening in the communications sector. Like, Meta had $47.5 versus $44.8. And Alphabet had $96.43 versus $94.04. And they've literally moved the quarter three revenue projections up by 2.7%. Just those two companies. So, actually, we're starting to see this a lot more than it's talked about is that there are maybe 12 companies that basically dictate how the S&P performs on the day.
Yep. So, you have 12 companies out of 500 that are doing everything. So, that means you have 488 companies that could be trading sideways or down.
And S&P will still go up because these 12 companies are just ginormous. And you look at, like, the breakdown. Like, 30% of the S&P is, like, within, like, I think three companies.
Like, it's crazy. That is crazy. It's so top heavy.
So, that's why I like to talk about the S&P. Because that gives you a false impression of this S&P as a whole. Well, we have, like, everyone's talking a lot about how we're in a great bull market.
And it's not really a great bull market. It's a bull market that's being ran by, like, a group of a cabal of overlords. A cabal of overlords.
Oh, there seems to be a consistent theme there. But, yeah, that's pretty screwed up. And when it comes to revenue, the only sector that is reporting year-over-year decline in revenues after quarter two is the energy sector.
Energy is getting destroyed. So, that's a perfect time to pick it up. Why is it getting destroyed? Because oil prices went, like, in quarter two last year, they were, like, 86, 85, something like that.
And in quarter two this year, they're, like, 63. So, they've lost, like, 30%. Of value? Of, like, the price of crude oils went down, like, 30%.
But isn't that something Trump's, like, suppressing on purpose to counteract all this other stuff that's going on? It's being suppressed on purpose. Because if you're not familiar, like, we don't really bring it up a lot. But, like, if you follow the inflation reports, if you subscribe to email, you know what I'm talking about.
So, you can just zone out for a minute. In the inflation reports, it breaks it down, like, how much everything is going up. And, like, a big component of the inflation report is the housing and the energy.
So, if he suppresses the housing and keeps the – I'm sorry, suppresses the energy and keeps the housing prices fairly, like, level where they are, the inflation is not going to appear as bad as it is. What we're seeing is that's what's happening with the energy. Energy is being suppressed so far that it's keeping the CPI and the – what is the other one? PCE, like, at lower levels than where they should be.
The actual inflation, if you exclude – if you just took energy out of it, actual inflation is, like, 3%, 3.5%. But because he has energies included in the calculations, it's bringing it down to, like, 2.7%, 2.5%. It's crazy, like, the manipulation going on. And that's even if you can trust the data coming out of the CPI and the PCE because it's from the Bureau of Labor Statistics where he, like, doesn't like the information. So, he fired the head statistician and he's going to put in one of his own people.
So, there is a potential for the market to have a very difficult time because the data is actually – it's biased data. It's not data. It's, like, basically an opinion.
And your theory on data manipulation. Talk about your school experience because I think this is actually a really valid point. Tim actually – something that actually came from college, surprisingly, in real life.
But you told me that you basically learned how data can be manipulated through the college courses that you took. When I was in – when I was doing my master's, it was in public administration. Like, part of the core components of public administration was, like, public polling and stuff like that.
And, like, it was a form of statistics, but it was, like, a weird one. And, like, one of the things that we learned right off the bat is you can ask questions in such a way that you manipulate the data to get the answer that you actually want to present as true. And that happens all the time.
You see it on Fox. You see it on MSNBC. You see it on CNBC.
You see it on CNN. Like, all the, like, major media corporations, they ask questions in a way that basically makes the answers come back to how they want to present the data. It doesn't matter.
It doesn't matter how you personally feel on it because the way the questions are worded is going to result in the same answer that they want to report on. So, like, that whole thing with the BLS, the Bureau of Labor Statistics, is very troublesome because if the market can't trust the data, less people, like, are going to invest in American companies, which could be, like, catastrophic to the actual market as a whole. And they don't talk.
They don't say shit about that. They're just like, oh, it sucks. He's, like, he's being an authoritarian by firing people that he doesn't like the information.
Yeah, they're not looking at the real effects. That's irrelevant. The dude's, like, crazy.
Like, have you ever seen John Mulaney? The horse is in the hospital. It doesn't matter. What matters is the fact that the data coming out of the BLS is not going to be accurate and that's going to cause problems down the road.
Well, it's, like, how do you make assessments with that? You, like, you kind of have to, like— Well, if you think about what people, like, if you think about what companies use the data for, they, like, okay, well, inflation data or employment data or whatever data— They use it to project their freaking GDP crap, right? They use it for, like, where to disperse their income. So, suppose there are, like, a company that's located in Europe and they want to invest in America. They use that data to say, well, it's a good time to get into America because the data is saying this.
If the data is manipulated, they have no trust in the data. They're not going to, like, infuse money into the American economy. It's very bad.
Like, I hate to get all, like, on the soapbox, but that's very bad that the data is not going to be— In my opinion, I could be wrong. I hope I am wrong. In my opinion, the data is not going to be accurate.
Yep. Anyway, that tangent's over. We're going to do a sector breakdown of the EPS, the sector breakdown of the earnings.
The communications sector reported the highest year-over-year earnings growth rate of all 11 sectors at 45.8%. At the industry level, all five industries in the sector— So, you have the 11 sectors, and within each sector, there's industries. And within the communication one, there's the entertainment industry, interactive media and services, wireless telecommunications, diversified telecommunications services, and media. So, within the communications sector, there are five different, like, little branches below it.
But at that level, all five of those industries reported year-over-year earnings growth. Entertainment was ridiculously—it was, like, 7.9% versus the estimated negative 4.9%. That's crazy. Interactive media was 26% above what the projections were.
Wireless was 10%. Diversified telecommunications was only 1%, and media was only 1%. So, like, the communications sector literally was being pulled up by entertainment, interactive media, and wireless telecommunications.
But, like, all five had that. In the information technology sector, it's reporting the second highest year-over-year earnings growth rate of all 11 sectors at 21.3%. So, like, half of the communications. So, communications rocked shit in quarter two.
Because information technology is usually the first one, and it's only at 21. It's only at half of what communications was. But at the industry level, all the industries in the sector reported year-over-year earnings growth.
Semiconductors and semiconductor equipment, electronic equipment, instruments and components, software, communications equipment, IT services, and technology hardware and storage.
Get immediate take IT at a really good quarter because all those different industries it was 27% down to 9% So there are their earnings over expectations were like almost all double digits. I'm not surprised by IT being so good again AI the financial sector reported the third highest at 13.1 Only four of the five in this the industries in the sector actually had year-over-year earnings growth Consumer finance is huge right now. It's 51 like there were they were 51 percent over like the 51% year-over-year earnings growth Whereas insurance was only 28 That's like if you watch if you watch the news like one of the biggest bitches people have about inflation is that insurance is up Like 40% or whatever Consumer finance is like 23% like had 23% year-over-year earnings growth more than insurance Let that sink in because consumer finance is like the banks that you use the credit unions that you use the fact that their year-over-year earnings growth was 51% means they have a Algorithms in place where they're basically making a shit ton of money off you Capital markets was 22% the capital markets if you're not familiar with that.
It's like the BDC's That's how much my insurance when I'm 16% like BDC like companies that lend money out to other companies because Traditionally like companies can't go to a bank to hey I need 50 million dollars for this project because the bank can't do that. So they actually have to go to a BDC That's why BDC's were actually created to begin with So that's the capital markets our financial services is up 10% The only one that was actually down was banks Which is ironic because consumer finance is tied into bank So I wonder how bad banks actually are doing the fact that consumer finance is so high and banks. Yeah Where are they going? I don't know the SoFi count as a bank It's probably financial services because of all the extra crap it offers.
So if I find interesting I bet you banks is more like credit union banks is like Wells Fargo But they do have other products. I actually would be really curious to see what the hell that encompass Oh, maybe one time. We'll do a part.
We'll do a podcast breaking down the industries within the sectors That'll be freaky Juicy and then we're gonna get to energy energy sector is just shit It had the largest year-over-year decline of all the 11 like what all 11 sectors that we said It's like the only sector that was really down and it was down like 17.6 percent from year over year Low like I was mentioning lower oil prices or the contributing factor because the average price of crude in at the end of quarter 2 in 2025 was 63 68 and that was 21 percent below the average price for crude in at the end of quarter 2 2024 86 out 80 66 I said 86 80 66 So the fact that oil went down 21 percent is just destroying the energy sector but if you look we're gonna get into like the At the sub it at the industry level four of the five industries in the sector reported year-over-year decline they all four had All the four that reported a decline were a double-digit decline Integrated oil and gas was 27 percent down oil and gas exploration and production was 13 percent down oil and gas Refining and marketing was 13 percent down and oil and gas equipment and services with 12 percent down The one the one I guess bright spot was the oil and gas storage and transportation was up 23 percent But if you think about it, there's more oil being pumped. There's gonna be more Vehicles Transporting it and there's gonna be more stored because there's being more pump So it actually makes like we're also gonna be consuming it if it's actually cheaper. I would imagine too Like you're like, oh, yeah, we didn't do gas before.
It's like hey, we can travel more because gas is cheaper I promise you we're almost at the end of the boring stuff. Then we get to the macro stuff. Mm-hmm Sector breakdown of revenue IT had the highest year-over-year revenue growth at 15% All six industries a kick-ass again So my like again like they're all about 10% like they did the IT had a really good really good quarter Shocker, which is should be no surprise because I tease everything The health care was the second one with the highest year-over-year revenue growth at 10.8% So it wasn't very far behind IT actually, which shocked the shit.
I mean when I saw this health care, yeah all five industries in the sector reporting year-over-year revenue growth and we have the Growth health care providers and services was up 12% pharmaceuticals of 8% Biotechnology was up 6% health care equipment supplies was up 6% and life sciences tools and service. I don't what the hell's life science There's only a 4% Well, I the one that I thought pharmaceuticals and biotechnology I thought biotechnology would be up way more than 6% actually because biotechnology if you're not familiar That's where they yeah, where they fuse medicine with tech like AI and stuff like that Maybe that falls into the tech realm instead of the actual 6% so that shocked me. Yeah interesting The communication sector was the third Highest one and that was there only up like tempers 9.7% again, it was a entertain like a Interactive media was up 15% that makes sense because people are always on their tablet their phone So like that obviously the revenue is gonna be more gaming Entertainment was up 7% which makes sense because people are numbing up because they hate their lives a while Wireless telecommunications makes sense at 7% and media was less than 1% I think it was like 0.2% so like media is getting shit on which is good because media is shit And again energy is the reporting their revenue climb was shit.
It was a day. We're down to 6.8% Three of the five industries reported year-over-year earnings or decline in revenue oil and gas refining was down 13% and Integrated oil and gas was down 12% and oil and gas equipment services down 5% oil gas and stored oil and gas storage of transportation was up 38% which again makes sense because there's more oil being Transported and stored because there's more consumption of it and the other one that was up a lot This is one you should pay attention to is oil and gas exploration and production. I really think Because in mining because they need to get more oil because That's what's going on Yeah OPEC is gonna do some we're actually and they're actually trying to open up like the The BLM lands and stuff like that to more drilling and stuff like that oil and gas exploration exploration is going to be a pretty big moving forward for the next we're gonna have three massive issues Crushes, so that's all the boring shit out of the way.
So now we got the guidance Okay, the guidance is what really matters is what we're all about here Yeah for the third quarter of 2025 and for the fourth quarter of 2025 the analysts the same ones that actually set the bar for the earnings per share Estimates and the revenue estimates they are calling for earnings growth rates of seven point two percent and seven percent So seven point two percent in quarter three and seven percent in quarter four So they're expecting a like if you remember up the top We were like the third quarter where we have double digit gains they're expecting a pretty significant pullback in earnings for quarter three and quarter four and For the calendar year of 2025 they're predicting year-over-year earnings growth of ten point three and we're above that So like still only way to get to ten point three is to actually have pretty shitty quarter threes and quarter quarter four And that's what I think is going to happen Interesting as the company level for the third quarter 38 of the S&P companies have issued negative EPS guidance and only 40 have issued a positive guidance So it's like split down the middle 50-50 the sectors with the worst guidance are the industrials. They have a negative guidance consumer discretionary materials and financials like Go back up top. So consumer discretionary.
I'm sorry industrial 64% of the companies that reported that actually issue guidance are Projecting negative guidance consumer discretionary 78% of the companies are projecting negative guidance materials is 83% in financials Like we were just building them up because everything's great financials of all the a hundred percent So all the companies that reported that issued guidance are saying it's going to be a bad quarter three Jesus on the other hand only IT as a sector had more positive than negative projections at 80% So it's supposed to pop off some more Not surprised as of the one I did this as of the now only three sectors consumer staples consumer discretionary And energy are forecast to have negative year-over-year EPS in quarter 3 2025 what that means is what they had in quarter 3 of 2024 only three of them consumer staples consumer discretionary energy are projecting quarter 3 2025 to be less than could last year's and only the energy sector is projected to have negative year-over-year revenue growth, so That's like energies they're projecting energy to be shit on again and consumer staples which makes sense because people aren't gonna buy money because everything costs more consumer discretionary which makes sense because people don't have money to Spend money on stuff. That's not necessary and energy because they're basically Manipulating not many. I don't say manipulating, but they're keeping the price low Yeah Okay for quarter 3 2025.
The analysts are projecting revenue growth of 5.8 percent. So that's again Drastically lower than quarter 2 and they're actually projecting revenue growth of 6.2 percent for quarters quarter 4 So again, they're projecting the quarter 3 and quarter 4 are gonna be bad both on the earnings per share front and on the revenue growth Front it's not gonna be catastrophic because you still have growth of you know, 6% but Again, but the S&P is top. That's q4 That's q4 is usually the big month, but the S&P you have to remember we were just discussing is top-heavy So like I if if Google and meta can move things 3% So like I'm betting like that's 6.2 to 5.8 percent It's gonna be basically by six companies and everyone else is gonna be treading water or underwater.
It's freaking very skewed so it's hard to Yeah, so just prepare for quarter 3 and quarter 4 like to be Simon I think it'll go sideways like we're gonna go sideways maybe a little up a little maybe a little bit this shit where there's a Massive rally a hot like what is it? All-time high like every week. I don't think it's gonna I don't think it's gonna carry on For the fiscal year 25 to 26 fiscal year. I don't like it.
When does that run? You know that was a October October fiscal. We're talking like federal. Yeah federal fiscal year ends September September so it's I think it's the 30th September or it's the end of August beginning of September Whatever the fiscal year is the same and I've been out of the government so long.
I can't remember Fiscal year from 25 to 26 six sectors IT financials real estate health care Industrials and materials have projected positive guidance. So for the fiscal year 25 to 26 IT 88 percent of the companies have project projected positive guidance financials 83 percent real estate 75% was shocked to show me it is September 30th and October 1st. Okay, I thought it was October.
I couldn't remember So yeah real estate 75% of the companies are projecting Positive guidance health care 73 percent industrials is 69 and materials is 55, but there are four Sectors who have negative guidance They are consumer staples 56 percent of the companies are projecting negative guidance consumer discretionary 64 percent Utilities is 77 percent. So you remember utilities really rocked it in quarter two and everything was going good But what utility sees going forward is there's I think I did that doesn't necessarily going to mean that like the money is gonna go down, but because they had such a rock in second quarter, the analysts might have a higher projection and Because the projection is so high like the company you're saying we can't actually meet that That's my take anyway and energy again 100% of the companies say we're gonna have a negative guidance Although one that shocked me when I was looking at the fiscal year was like the communications has just been rocking it like right now It's split 50-50. They don't know if they're gonna have a positive fiscal year or negative fiscal year interesting Now we're new calendar year.
I don't know why they broke it down fiscal year Government, I don't understand Calendar year 2025 the analysts are projecting earnings growth of 10.3 percent and revenue growth of 5.8 Only one sector energy is projected to have negative EPS and revenue growth for a calendar year of 2025. Look at that This is a major way to manipulate data fiscal year versus calendar year literally you just change your freaking window of observation and you can But if you look at me if you go back and you watch if you watch our first quarter We did this in the second quarter. Our earnings growth is really it's probably at 12.5 percent for quarter one quarter two.
So to get the two to get to ten point three That means it's gonna be sideways seven point eight percent around there seven point six percent, maybe So it's going to go down a lot like quarters again This is just reaffirming the quarter three is projected by all the analysts and the companies themselves to be pretty piss-poor Actually negative. Mm-hmm. Well not negative but like it's going negative from where it's at But like if you tabulate it as a whole still get positive for the year Mm-hmm for 2026 though analysts are projecting earnings growth at 13.3 percent and revenue growth at 6.3 percent So like that makes me that people are like when the probably when they read it They're like, oh 13.3 and 6.3. That's great and all but the revenue growth at 6.3 over something.
That's only 5.8 It's not all that great. I guess still that's still kind of like a sideways year Earnings for again earnings growth EPS. I kind of just include that so because it's part of the report But like I don't really pay much attention to earnings per share But they are analysts are projecting that all 11 sectors are going to have a PS and revenue growth in calendar calendar year 2026.
Well, if everything's suppressed the year before that kind of seems like a duh, right? now obviously what they'll like like this isn't set in stone because like anything when it comes in the market like if some shit comes out like like say the tariffs have a really a super negative impact in quarter three, they'll Revise this downward. So I at the end of June what they were saying is 2026 it's gonna be pretty pretty good for all 11 sectors and for revenue growth, but not great I mean weird news could happen too, right? There could be like more tariff crap or you could have a war break out or you could have all sorts of stuff happening Well, I want to like so I want to say like this is why I always put experts in quotation marks You guys catch that there are there are twelve thousand four hundred and twenty five ratings on stocks in the S&P 500 Of the twelve thousand four hundred twenty five ratings fifty five point seven are buy ratings and Thirty nine point two or hold ratings with only five point one being sell rating so that's why I say the experts because they don't have the nuts to say this company should be sold because they all just like What they'll do is like by like they'll say buy it after the prices already went up past like their target price So they like I don't know if it fits their metrics or whatever and when it's when they think it's a sell They'll say it's a hold They just don't have the nuts to say it's the south that's what the at the sector level the energy at 66% IT at 64% communication at 63% have the highest percentage of buy ratings which kind of like the information technology makes sense energy makes sense because everything's been shit on and Communication again is just it's been performing so well. They have no choice, but to have that Consumer staples has the worst of the lowest percentage of buy ratings at 40% So like I just thought that was interesting I wanted to include why I always say experts include what in quotation marks because they're not They may be experts, but like they're kind of like yeah But it could very well just be being dubbed experts So you listen to them, but you're they're telling you to sell at the bottom and buy at the top so speaking of experts target price for the S&P 500 in 2025 based on current EPS and revenue plus projected EPS and projected revenue for the remainder of 2025 is 7148 which is 13% above the closing price of 6340 I think that like I said, I think this was last week At the sector level health care is expected to go up 24 20.4 percent and energy is expected to go 18.4 percent Price increase from where they currently at the end of June But it makes sense because those actually have the largest upside differences But on the other hand utilities is only expected to go up 6.5 percent so like how we've been like talking about utilities like that there I don't think they're gonna be that over performing the rest of 2025 but I do see energy and health care like I've been saying all I'm just cute like APD CIVI if you like Exxon Mobil if you like Chevron like get them why they're low because dude.
Oh, yeah We're buying up stuff up all the time I can't like I buy CIVI all the time like it's like a city probably one of the most under undervalued oil stocks But that is a They have a great dividend, right? Yeah, great Well, it's only it's only 50 cent and they drop a special one from time to time Yeah, but what's their percent because they're so undervalued 12 12 percent. Yeah, very nice So that's a brief I hope not painful Overview of what happened in quarter two now we did like if you haven't listened to last week's podcast We actually did go into Individual stocks that were holding their earnings and it was more in-depth than this This is just kind of a broad stroke of what the S&P is what the S&P did and like where it's projected to go so Because you know that the S&P is projected to not do that great in quarter three and quarter four the options yours you may want to Start stocking money in the bullet shares and the THTA to save up cash for like whenever there's a perfect buy opportunity You could subscribe to email. I do present like Ideas to research and potentially buy every week top 10 stocks go next div I'm not saying go all into cash whether because I don't think the market's gonna go I can do a into a recession Like I think we are.
I think we're still actively putting some stuff in like cash reserves and other stuff in Doubling down on certain positions that are very undervalued like again. He just talked about  CIVI  CIVI something We're definitely did like I'd like what I've been doing like I did because of I'm pretty big on health care in the retirement before I just didn't and did initiate a position in LTC, which is a healthcare REIT and Because I think consumer discretionary or slash consumer staples is a place like where there's potential for a weakness I did also in the retirement account initiate a position in target because I do think targets gonna either trade sideways or go down and I can keep accumulating shares with the cash in the retirement account with the van life account I what I've been doing is I've been reinvesting Majority of it. I do have cash coming in for some of them, but because we have things going on behind the scenes I've actually just turned like a lot of drips off and just putting the cash into the The checking account which yields like 4% in Schwab That's all I have going on once we get the condo done and everything where I can do that We're like in the last hurrah where our holding costs are kind of like and I'm not working as much for my dad to have That float so we're gonna probably tap a little bit of that cash, which is Ideal that's why it's there.
I know it is there, but it's not ideal from the compounding factor But at the same time like not very much is in buy ranges, so it's not detrimental completely I'll be like I I think the markets over about I think the markets do for a pullback I think the markets went up too much and they're ignoring too much too many red flags At some point the bill is gonna come due I don't know when it's gonna come due because you can't go up whenever everything's saying Like honestly all the data that we got out before he fired The overlord fired the BLS person all that data is suggesting the interest rate increase Yeah and they're talking about one to two cuts interest rate cuts for the rest of your like you can't keep doing this something's going to Give at some point where we're going to have a Pullback, I don't know maybe 10% 12% even if it's a panic scare just a freaking Shootout weak hands or something like they're gonna do something for sure skis, but that's that next week because of the the first podcast of September is when we do the the retirement dividends collected for the quarter and I didn't really have a Idea what to plug between this and then so next week. We're going to have an idea next week What I'm preparing is I'd like what we're holding what's in the bag What's in the bag? So like what we're holding in the retirement account and what we're holding in the van life account I'm gonna have it broken up like eat what ETFs were holding what closing the funds were holding what growth stocks were holding just to Give you like a and why I'm assuming right Potentially, but like what I found like what I found looking back over the dividend like I watch although like all the podcasts we put up I watch and What I found with the dividend ones is they were too long So one way to shorten that is to basically say here's what we hold So that next like the following week when we do the retirement portfolio I can just say we went over what we held so then we can just go through like how much we made and what to buy up to prices, but yeah, well, I'm probably gonna I'm giving a list of what we're holding and why we're holding They're like what my thought is like what my thought process it's gonna be brief because we have 53 and Just like I'm almost done with the retirement when we have 53 stocks in that one. We're not doing them both together Are we yeah? Oh, I might break that into a twofer.
It might be it might be a twofer but I think it'll actually help with the viewers when it comes to time for the the dividend reporting because they don't have to worry about like I don't say well For this reason you can literally just stick to like buy up to use and then you can like the first one's gonna suck, but I think I'm probably going to keep the process the same like so and Isn't in December when we do it always look at the bog what we are what we have in the bag is basically to be What changed from like what changed from? Yeah, so like what we bought this and we sold that so that it'll be the shorter But the first one's gonna be long But I think it'll be interesting because you can see like the thought process like this Strategy and the thought process we have going I think that's the most fascinating part like when he talks to me like that's the kind Of stuff I care about and then once you get an idea of why Tim said go and any of them pique your interest You can listen to the weeks after that where we tell you the buy up to price and how much we've actually made in dividends So I think what I'm seeing is like what people like like one of our most like our boat like our most viewed things are like our dividends or our yield maxes or People want to see what we're making on our diddly little portfolios or our What is it the weekly the weekly payers weekly payers? Yeah, that's huge because everybody was like a lot of people like the dividend thing and like we're actually very transparent about it like I'm not a guy and I don't I can't wait till we have the extra like hundred thousand to be like here we go What's this person that's gonna be alive like we're gonna do that live like here's what like here's what we're doing So it'll be like during the day, but whatever because the markets only open during the day, you know, yeah Who cares doesn't matter to me. It's gonna be fun So that's that's the plan moving forward the next three weeks and then and once we get through that I'll have something Very nice something else up. Look at who came cats super excited about what I just talked about.
You're awesome Super pain in the butt skis like that sounds great. Maybe we should do that more often. You're not paying attention to me You're too busy talking to socks So jealous you guys have a good week and we will see you next week with what's in the bag All right, see you guys next week next week should be fun.