Markets

Earnings Expectations are Falling. That’s a Good Thing

The first four months of the year were dominated by trade and economic policy uncertainty. But let’s not forget what ultimately matters most for stocks: corporate earnings.I’ll dive into some details below, but the high-level takeaway is that U.S. corporations held up relatively well in the first quarter, while also scaling back expectations for the quarters ahead. And I see this latter point as good news for stocks.As I write, roughly half of S&P 500 companies have reported Q1 2025 earnings, and the results show +14.0% year-over-year earnings-per-share (EPS) growth on +4.0% higher revenues. Approximately 72.3% of companies beat their EPS estimates, which is pretty much in line with historical averages.

Read the entire article: Earnings Estimates Are Falling—And That’s Good | Zacks Investment Management Blog

Market declines come in all shapes and sizes, but they tend to follow similar patterns over time. Corrections are short, sharp declines between -10% and -20%, while bear markets are declines greater than 20% that fall into one of three categories

Structural – These bear markets are caused by severe dislocations, typically in financial markets, and are often associated with ‘bubbles.’ The 2008 Global Financial Crisis is an example of a structural bear, which often take several years to fully recover from.

Cyclical – These bear markets are more closely tied to the business cycle,

Read the entire article: Not All Selloffs Are the Same—Do You Know Which One We’re In? | Zacks Investment Management Blog

President Donald Trump’s moves to rip up the world’s military alliances are creating ways for investors to profit in S&P 500 stocks using ETFs.

Six of the eight largest defense and aerospace ETFs, including iShares U.S. Aerospace & Defense (ITA), Invesco Aerospace & Defense (PPA) and SPDR S&P Aerospace & Defense (XAR), are outperforming the S&P 500 this year, says an Investor’s Business Daily analysis of data from ETFdb and MarketSurge. And the entire group of eight ETFs is up an average of nearly 7%, while the S&P 500 is down 3% this year so far, says S&P Global Market Intelligence.

Read the entire article: S&P 500: Investors Find Ways To Profit From Trump’s Global Arms Race | Investor’s Business Daily

The Federal Reserve in a closely watched decision Wednesday held the line on benchmark interest rates though still indicated that reductions are likely later in the year.Faced with pressing concerns over the impact tariffs will have on a slowing economy, the rate-setting Federal Open Market Committee kept its key borrowing rate targeted in a range between 4.25%-4.5%

Read the entire article: Fed rate decision March 2025: Fed holds interest rates steady

With consumer confidence taking a notable dive in recent months and inflation still hovering above the Federal Reserve’s target rate, economic anxiety has become a defining feature of the early days of Trump’s second administration. While the president has begun implementing his promised tariffs against several countries, what’s more remarkable

Read the entire article: Trump’s tariff threats are proving a surprise tool against inflation

The U.S. stock market remains strong. Mega-cap technology companies have propelled index returns higher since last October, but the rally has also gained breadth recently. The S&P 500 equal-weighted index, for example, has also risen to a record high, and approximately 20% of S&P 500 stocks are trading at or near 52-week highs. That’s the highest percentage we’ve seen since May 2021.1In late February, I wrote a column about strong market returns making investors worried.

Read the entire article: Waiting for the Market to Drop Before Investing? Read This First. | Zacks Investment Management Blog

This week’s chart looks at the massive divide between year-to-date returns on the Big 7 tech stocks and the rest of the S&P 500.

Read the entire article: Concentrated equity market persists in 2023 | FS Investments

(Prescript: Please note that this is BEHIND us, not in front of us. ~jrs)

Treasury bonds’ losses over the past three years have amounted to the worst bear market in the nearly 250-year history of the U.S., according to Bank of America’s Michael Hartnett, who included some charts on Treasury performance in his latest “flow show” note shared with MarketWatch late last week.

Read the entire article: Treasury-market selloff has become the worst bond bear market of all time, according to BofA — TradingView News

It’s been a rough half of the year for the S&P 500 — with it slipping nearly 3%. But that’s not stopping analysts from calling for an amazing next 12 months. Wall Street analysts are expecting monster rallies in the next 12 months in 10 S&P 500 stocks, including…

I read a lot of negativity out there, but here’s a reminder that there are two sides to the market and there is ALWAYS the likelihood that the majority could be surprised! ~jrs

Source: S&P 500: Analysts Predict A 19% Surge Soon — Lifted By 10 Stocks | Investor’s Business Daily

We thought we’d first reflect on the stock market which — despite having to reckon with banking blow-ups, geopolitical tensions, and interest rate hikes over the last 3 months — has had a pretty solid start to the year.

Read the entire article: Chartr Newsletter: Mar 27, 2023