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:
John Luke: We’re seeing a bump in market volatility but still a very tame year, with no 2% drops since Feb 2023
Data as of 07.17.2024
Brad: though the indexes are being cushioned by some serious flip-flopping under the surface headline numbers
Source: Bespoke as of 07.17.2024
Brett: Of late, small-caps are providing support aginst the abrupt large-cap selling, perhaps on hopes the earnings turn is finally approaching
Source: SoFi as of 07.18.2024
Dave: reversing the trend towards large caps in recent years. Which was a reversal from the preceding two decades
Source: Raymond James as of 07.18.2024
Beckham: Markets seem to be settling on the idea of a full 1% of cuts by March 2025
Source: CME Fedwatch Tool as of 07.17.2024
Arch: which historically has done more for valuations than for near-term earnings prospects
Data as of June 2024
John Luke: While theory says rate cuts should stimulate economic activity, one area that has run counter to the Fed’s goals has been the high cash accruing through Treasury investments
Data as of 07.15.2024
Joseph: Higher coupons means some bonds can now offer better reward : risk than when rates were lower
Source: JP Morgan as of 06.30.2024
Brian: but once you factor in taxes and inflation, the reward is much less compelling
Source: Aptus via FRED as of 07.15.2024
Brett: and once inflation creeps into the system, purchasing power never reverts back
Dave: Q2 earnings are expected to move back into growth mode after two full years of flattish overall results
Beckham: and updated estimates are moving in a generally positive direction
Data as of 07.05.2024
Brad: that said, headline results generally tell investors the story they want to hear as 3 out of 4 typically “beat” the estimate
Data as of 07.08.2024
Brad: Another key consideration for aggregated earnings comparisons is that the underlying mix has changed quite a bit over time
Dave: with a general trend towards higher profit margins but some sectors improving more than others
Source: Strategas as of 07.17.2024
JD: It used to be helpful to own international stocks for diversification, but that value has shrunk in recent years
Source: WSJ as of 07.17.2024
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