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Feb 20

EDSP = Earnings Drive Stock Prices

With 82% of the companies in the SP500 now having reported their 4Q23 results, the theme of “earnings growth” is clearly back.  YoY earnings growth of +14%, which is the best showing since 4Q21.  We think earnings continue to grow double digits for 2024 (we are expecting better growth in... read more →
Feb 13

Fed cuts just got pushed to May

The US equity market is up nearly +20% since early November 2023 so a pullback after three very strong months is completely natural.  The cause for today’s price action is an above-average CPI inflation reading but a deeper dive into the underlying data is warranted. Headlines can be misleading.  Core... read more →
Feb 09

Too Late To Get In?

The market has been on fire since October 2023 with the S&P 500 moving 22% higher. And it hasn’t been just the magnificent 8. Small caps are ripping, healthcare and financials and industrials joined the party, and emerging markets ex. China have moved to new bull market highs, etc., etc.... read more →
Feb 05

Lots of market cap created very, very quickly

We don’t spend a lot of time focused on individual stocks.  Our attention is focused on market cycles, finding new investment opportunities, and working on getting asset allocation right. BUT, META (the artist formerly known as Facebook) did something on Friday that has never happened before.  In a single day... read more →
Jan 26

Show me the money

In the investment business, it is sometimes easy to get caught up in daily deal headlines, economic announcements, or on a particular stock that might be soaring or swooning on a given day.  We live in a world of unlimited data, delivered instantly and the financial media collectively draws conclusions... read more →
Jan 25

Triple Threat #3: corporate earnings growth

Let’s review our Triple Threat themes for 2024: Commencement of Fed cutting cycle Room for broad P/E multiple expansion And today’s theme #3:  all-important corporate earnings growth   The direction of earnings is the key driver to stock prices over the long term.  Here comes the bad news/good news:  The... read more →
Jan 18

The Triple Threat: Part 2

Let’s review our thoughts on the “Triple Threat for 2024”: Markets LOVE when the Fed goes from hiking rates to pausing to cutting rates. Right now, markets odds are 60/40 for a March 2024 rate cut. Equity market multiples have spent the last 2 years resetting lower.  See the beautiful chart and... read more →
Jan 16

The Triple Threat: Part 1

In basketball, the “triple threat” position is a stance where the player can either pass, shoot, or dribble.  It’s a very athletic stance that creates options.  It’s the absolute cornerstone of basketball offense. In investing, the “triple threat” is the rare investing environment that exists when the Fed starts cutting... read more →
Dec 20

The Santa Pause Rally

The Santa Claus rally is a well-documented seasonal anomaly that sees the stock market produce abnormally high returns around the Christmas holiday. The term was coined in 1972 by Yale Hirsch, founder of the Stock Trader’s Almanac. In his original definition, the rally covered the period between Christmas day and... read more →
Dec 15

2024 Earnings Outlook

As we approach the turn of the calendar, we take a look back at how S&P 500 earnings fared this year, and a look ahead at what is in store for next year. The chart below shows the earnings growth rate estimates for both 2023 and 2024, for the S&P... read more →