Market Commentary
Earnings Momo to Increase in Q2 and Q3 2024
Our prior market commentary, published on March 15, 2024, listed the likely catalysts that would continue to propel the market upward, as well as those that could result in a pullback or even a mild correction.
We have reached the pullback stage.
The disinflation narrative baby was dropped on its head, and Fed policy rate cuts have been kicked down the calendar and revised down. For now.
Bond yields have moved above our 4.5% risk target.
Geopolitics were a headline catalyst for motivating investor behavior to monetize the above.
More fundamentally, we know that without the five of the big tech names (AMZN, GOOG, META, MSFT, and NVDA), earnings would be down 6% in Q1 instead of the consensus estimate of .5% growth.
Collectively, these names are expected to deliver 64% EPS growth, which does the heavy lifting and brings aggregate earnings into the black for the quarter.