Analyst Earnings Revisions Slip, Consumer Discretionary Hits Bottom
Analyst revisions to forward earnings expectations have dropped for the first time since early January. It is not unusual for revision momentum to turn south just prior to earnings seasons, and in fact estimates dropped in advance of the last three earnings seasons as well. Revision momentum was negative for seven of the eleven sectors, with consumer discretionary revisions worst. Energy revisions are most positive among sectors. Negative adjustments to expectations may just be getting started given the current contrast between very elevated forecasts and souring economic data amid rising commodity costs. Analysts are currently forecasting 12.8% YoY EPS growth for S&P 500 companies in 1Q26, on par with the 12.9% recorded in 4Q25. Last year, the index recorded 13.4% growth. @MikeACasper @HB_Wealth
Elevated Oil Prices Trigger Lagging Earnings Downgrades
Oil price impacts are likely to start showing up in negative earnings revisions this month. History suggests elevated oil prices have a lagged impact on fundamental conditions, and as long as oil prices remain somewhat elevated, downward revisions may remain...
Rising 5% Breakeven Inflation Threatens S&P Valuations
Bond markets have rapidly repriced near-term expectations for U.S. inflation in response to surging commodity prices. The implied 1-year breakeven inflation rate is now above 5% for the first time since 2022. Elevated bond market-implied inflation expectations may present a problem...
Below 200‑Day MA Sparks Extreme Market Volatility
Stocks’ technicals continue to weaken, and for the first time in the post-Liberation Day bull market, U.S. large cap stocks are testing their 200-day moving average. Drops below the moving average have historically triggered more volatile trading. Extreme returns, both positive and...
Stocks Held Until Oil Surge Triggered 2022 Inflation Sell‑off
The equity market was "resilient" at the start of the Russia-Ukraine war as well...it took five weeks of high oil prices before stocks started to capitulate to inflation pressures in 2022. https://t.co/CXaKnBXbHv
S&P Breadth Drops Below 50%, Warning of Market Weakness
The S&P 500 is losing its breadth at both the stock and sector level, suggesting that the minor drop in the index year to date may be masking emerging weakness. The percent of stocks on the index that remain above their...
S&P 500 Breach Signals Likely Correction Ahead
The S&P 500 has broken through key support at its 100-day and 20-week moving average for the first time in about a year, increasing the probability of a full correction in the index in coming weeks. There have been just 8...
Stagnant Jobs and Oil Spike Signal Recession, Defense Favored
Recent employment trends combined with the oil price spike suggest recession risk is rising, and this was not on the market's bingo card this year... Though February job losses were skewed by one-time effects, the weakness is nonetheless part of...
Geopolitical Shocks Trigger Short‑term Stock Drops, Not Recessions
Geopolitical risks may weigh on the outlook for stocks in the short run, with the S&P 500 now below key support at its 100-day moving average. Stocks have been transitioning leadership toward commodity-sensitive sectors and value stocks so far this...
Industrial Sector Hits 30‑year Valuation Peak Amid Optimism
S&P 500 Industrials’ forward P/E, at 26.5X, matches sector P/E in 2021, when earnings were impaired by the pandemic, and at 1.24X the index, is higher than at any point in the last 30 years. EV/Forward EBITDA, Price-to-Sales and Price-to-Book...
US Large‑Cap Valuations Still Overpriced, Risks Loom
Recent rotation has helped resolve some of U.S. large cap stocks’ valuation excesses, but risks remain to the downside for U.S. multiples. Large cap growth’s sales multiple is still near its all-time high, at about 6X, and growth’s earnings multiple may...
