So far, 2018 looks like it’s going to be another bang-up year for companies in the S&P 500 index.
 
As the first-quarter earnings season begins this week, S&P’s Capital IQ is estimating a 16.3 percent year-over-year gain in first-quarter operating results for the index, and an 18.6 percent increase for the full year.
 
The gains come on top of a 14.5 percent advance in 2017’s fourth quarter, and an 11.9 percent earnings gain in 2017.
 
That fourth-quarter gain, by the way, was the 24th consecutive quarter in which actual earnings growth exceeded estimates, according to a report Monday from the research firm CFRA, using S&P Global and Capital IQ data.
 
And at least in terms of projected earnings and recent market history, the market doesn’t seem horribly overvalued.
 
The S&P 500 index currently trades at 16.7 times the next 12-month earnings estimates. Since the year 2000, the average multiple is 16.4 and the median 15.8.
 
For the first quarter of this year, earnings are projected to be up for 10 of the S&P 500’s 11 sectors, led by energy (+68.5 percent), financials (+23.8 percent), and information technology (+18.0 percent).
 
Relatively weak results are expected for health care (+8.3 percent), consumer
discretionary (+7.3 percent) and real estate (-6.8 percent).
 
Energy companies are benefiting from stronger oil prices, as West Texas Intermediate crude oil prices have risen about 20 percent year over year. Financials should see improved net interest margins from higher interest rates and growth in loan volume. And the first quarter is usually strong for tech companies as consumers make purchases after the holiday season and corporations implement new technology budgets.
 
Health care is seasonally slow in the first quarter due to resets of health insurance deductibles and lower office visits. The consumer discretionary sector includes retailers and media companies that are under pressure from online competitors, as well as auto manufacturers that face rising material costs. And the real estate sector continues to be beleaguered by retail REITs that have suffered from store closings, according to Capital IQ analysts.