Earnings Season is Back—Time to Grab Your Coffee!
Hey, money movers! The quad‑letter Q2 reporting show starts this Friday, 12 July. Investors are already sharpening their pencils, ready to dive into the numbers coming in.
What the Numbers Say
- 8.8% YoY earnings growth for the S&P 500 – this is the fourth straight quarter of solid gains and the fastest spike since the first quarter of 2022.
- 4.6% YoY revenue growth overall – that’s a 15th consecutive quarter of uptick, and 9 out of 11 sectors are riding the revenue wave.
Valuation Talk: Is the Market Too Hot?
Charts and receipts say the market feels a bit dreamy: the forward 12‑month price‑to‑earnings ratio is now 21.2. Compare that to the 5‑year average of 19.3 and the 10‑year average of 17.9 – yep, a little pricey.
There’s also an earnings gap lurking between how much the index trades for and its adjusted earnings per share. In plain English: investors are asking, “Is this steep price worth the growth?”
Bottom Line: Keep an Eye on Guidance
In addition to raw numbers and sector performance, folks are laser‑focusing on forward guidance for the next quarters. Expectations have been carefully trimmed throughout the year, so any surprises can ripple across the market.
So while the earnings are climbing, the price tags might be giving the market a gentle urge—just like a bustling coffee shop on a rainy Sunday. Stay tuned, stay curious, and enjoy the ride!
Quarter Keeps Wiggling: Earnings Expectation Slip‑Stream
Suddenly Smaller, Not Far‑Bigger
When analysts got their calculators out for the latest press night, they nudged the S&P 500 EPS forecast down about 0.5 % for the first three months of 2024. That’s a tad kinder than the 3.4 % down‑tweak we normally see over a five‑year lookback. But even a modest dip keeps the message clear: when a firm can cut expectations and then hit a big‑picture beat, doing the same trick with guidance is far more elusive.
Sectors on the BRR
Looking at the building blocks of the index, nine of the eleven S&P sectors will post YoY revenue growth while eight will report earnings expansion. The champs—Communication Services, Health Care, Information Technology, and Energy—are projected to grow over 10 % YoY. The Materials group takes the opposite tack, seeing the steepest earnings slide of any sector.
Banking Beat Preview
When it comes to the nibbling‑on‑the‑perfume‑industry of reporting, banks will top the chorus:
- Friday – JPMorgan, Wells Fargo, Citi open the doors for the onslaught
- Monday – Goldman Sachs steps into the spotlight
- Tuesday – Morgan Stanley and Bank of America bring the finale
These institutions expect a high single‑digit YoY decline in earnings, largely mirroring the 2024 first‑quarter environment. Net interest income remains capped by slow loan growth, and margins hover near their lows before the anticipated September Fed cut in our base case. Bank chiefs will also unpack mild macro chatter, as the U.S. drifts toward a soft landing—even as cracks appear in the labor market.
Big Tech Earnings Are Coming—Hold On Tight!
Even though the next earnings window is still a few weeks away, investors are already sharpening their focus on the tech giants that dominate the market. The Communication Services sector (think Meta and Alphabet) is slated to deliver the highest year‑over‑year earnings growth among all 11 sectors in the index. That’s the kind of headline‑rap that gets people’s heads spinning.
Why IT Still Stands Out
Followed closely by Information Technology, this group—including stars like Nvidia—topped the list with the third‑highest YoY earnings growth rate. Tech lovers can breathe a sigh of relief; the sector’s pulse is steady, even as the rest of the market updates its dance cards.
Nvidia: The “Must‑Watch” Release
- While Nvidia’s earnings report is scheduled for the end of August, it’s already on everyone’s radar.
- With a jaw‑dropping 165% year‑to‑date surge, analysts are eating up whether the stock still has a few rockets left in its engine.
- Investors are eager to see if the momentum can sustain itself or if the company needs a new power‑up.
As the countdown to earnings season ticks on, keep an eye on these tech titans. Whether it’s the unstoppable Communication Services climb or the thrilling IT performance, the big tech narrative promises to keep the market buzzing.
Glancing Ahead: What’s on the Market’s Radar
It’s not just about quarterly earnings this week—the equity universe is buzzing with a handful of big‑name events that could swing the market one way or the other.
June CPI: The Siberian Slumber Party
- Deadline: Tomorrow, Thursday, July 11th. Mark your calendars.
- Why it matters: More than just numbers, the CPI is the watchdog watching whether the September FOMC cut can still happen.
- Policymakers and investors alike are waiting for a signal that price pressures are finally cooling. Remember the April and May prints? They kept telling us the heat was easing.
GDP & PCE: Quadrants of Economic Health
After the CPI, the Q2 GDP and the crucial PCE metrics will be released. These figures give a clearer picture of how the economy is growing and how inflation is behaving.
Macro‑Mayhem: The Top‑Tier & Second‑Tier Releases
From industrial output, retail sales, to job numbers—every macro data point is on standby. The market likes this rhythm of data like a drummer likes a good beat.
The July FOMC Meeting: The Final Piece
At the end of the month, the Fed will convene again. Their tone, policy stance, and any surprise moves will likely seal the story for the week.
So, as you trade or just watch from the sidelines, keep an eye on these key events. The market’s mood is a living thing, and it grows a little more predictable when the headlines keep coming!
Investor’s Lively Guide to the Market’s Mid‑Term Momentum
Picture this: earnings season is the stock market’s version of a rollercoaster with all‑the‑thrills and a few nasty drops. Still, the path of least resistance in the medium term is steering us straight toward the upside.
Why the Fed’s “Put” Is Still Protecting the Globe
Think of the Fed put as a forceful safety net—flexible, but hard‑hitting. It’s still in place, holding the line and helping smooth out the bumps that might otherwise send shares spiraling.
Economic & Earnings Growth: The Resilient Duo
- Economic Growth keeps pumping the engine, so the fundamentals stay solid.
- Earnings Growth is still showing resilience, even if it falls short of the lofty estimates many market analysts hover above.
Dips = Golden Opportunities
Because the market’s downturns stay fairly shallow, each dip is essentially a gold mine waiting to be struck. In plain English: when the price dips, it’s a great cue to jump in and buy.
Bottom Line
Even in a world where earnings season could nudge stocks around, the market’s medium‑term groove remains on track. The Fed put is a safety net; fundamentals stay strong; dips happen, but they’re cheap—so the scenery is ripe for savvy buying.
