QQQ - Outlook Weakening Under Equity Market Optimism

2024-01-16 21:20:00 ET

Summary

• January US Empire Manufacturing reading this morning was -43.7, much worse than the -5 estimated and much weaker than during the 2008 financial crisis/great recession.
• The analyst consensus is for S&P earnings per share growth of more than 10 percent over the next 12 months, even as nominal new orders are contracting.
• US Gross Domestic Income was -.2% year over year in the third quarter compared with a 2.9% estimate for GDP.

January US Empire Manufacturing reading this morning was -43.7, much worse than the -5 estimated and much weaker than during the 2008 financial crisis/great recession.

Source

Meanwhile, the analyst consensus is for S&P earnings per share growth of more than 10 percent over the next 12 months (red line below since 2000, courtesy of Mikael Sarwe ) even as nominal new orders are contracting (in blue). Typically, earnings follow new order trends.

At the same time, US Gross Domestic Income was -.2% year over year in the third quarter compared with a 2.9% estimate for GDP. This disconnect is extreme and commonly, GDP is revised lower in retrospect to meet GDI.

Dr. Hunt illuminates many of these readings in the segment here .

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