Our team looks at a lot of research throughout each day. A few charts that caught our eye this week, and the way they fit the unfolding puzzle of evidence:
Brian: We’re in the strongest time of the year, and stocks aren’t letting anyone down
Data as of October 2024
Brett: and despite recent success, equity investors are much less tied to margin debt than they were in the post-COVID rally
Brad: The US economy has become more tied to services than goods in recent years, resulting in less volatile swings
Beckham: and the U.S. consumer remains a steadying force
Dave: As long as income tax collections from those consumers remain strong, it’s hard to see widespread difficulties in the economy
John Luke: and right now, individual consumption of services shows it to be a steadying force
Data as of 10.28.2024
Dave: Not only is this spending happening at the consumer level, but corporate buyers are also feeling good about future deliveries
Source: Strategas as of 11.05.2024
John Luke: and the strength has been pretty broad across most parts of the country
Brad: The one area of consumer weakness has been in the home resale market
Data as of October 2024
JD: with inventories starting to rebuild after a period of historically low listings
Brian: and potential buyers still anchoring to the absurdly low mortgage rates being offered in the post-COVID period
Source: Aptus via FRED as of October 2024
Dave: Q3 earnings season is coming to an end, and for the most part large-cap companies have performed better than expected a few months back
Dave: but the outlooks for smaller companies have not been nearly as strong
Source: Raymond James as of 11.07.2024
Dave: and the weakness is spilling over into 2025 estimates
Source: Raymond James as of 11.07.2024
Joseph: This weakness is surely a contributing factor to the widening valuation gap between small and large caps
Source: Raymond James as of 11.06.2024
Joseph: but even in the S&P 500, the past decade has seen a widening gap between “cheap” and “expensive” stocks and sectors
Source: Raymond James as of 11.06.2024
Brad: and while some blame the rise of passive investing, there are a number of contributors to this trends, with company growth seemingly the overwhelming leader
John Luke: Remember, correlations across stocks and bonds are (widely) moving targets
Disclosures
Past performance is not indicative of future results. This material is not financial advice or an offer to sell any product. The information contained herein should not be considered a recommendation to purchase or sell any particular security. Forward-looking statements cannot be guaranteed.
Projections or other forward-looking statements regarding future financial performance of markets are only predictions and actual events or results may differ materially.
This commentary offers generalized research, not personalized investment advice. It is for informational purposes only and does not constitute a complete description of our investment services or performance. Nothing in this commentary should be interpreted to state or imply that past results are an indication of future investment returns. All investments involve risk and unless otherwise stated, are not guaranteed. Be sure to consult with an investment & tax professional before implementing any investment strategy. Investing involves risk. Principal loss is possible.
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