ACTV - Wall Street Exclusive: All About Earnings

2024-07-27 02:18:51 ET

Summary

• Consensus expectations for S&P 500 earnings are for them to climb 9.5% year-over-year in 2Q24—the fourth consecutive increase and the fastest pace since 4Q21.
• It's one thing for companies to report a solid Q2. How the market reacts to said earnings is another story.
• Fed Fund futures have priced in a 100% probability that the Fed will cut interest rates in September. This could be a sell-the-news event or a big disappointment.
• Bottom line: Investors should know by now the market has a mind of its own, and nothing should be taken for granted.

"Common sense is seeing things as they are; and doing things as they ought to be." - Harriet Beecher Stowe

My View of Wall Street

The pendulum swings back to the Micro from the Macro as the official start to the 2Q24 earnings season has begun. Investors have witnessed a weaker macro backdrop unfold, but it hasn't mattered. The S&P notched its 37th record high this year, while the NASDAQ Composite has recorded 25 new highs.

Earnings and upgraded earnings revisions are the reason, and we know that typically trumps many of the "concerns." So, the next 5-6 weeks will provide a glimpse into how companies and consumers navigate the growth slowdown. It seems we always say the same thing around earnings season....

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