Uddrag fra The Market Ear/
Higher hurdle
The hurdle rate for Q2 earnings seem to have been lowered less than normal this time around.
Source: JPM equity strategy
How good is good enough?
“JPM down on a huge print. ASML down 13% over two days post earnings (I accept tariff news played a part here too). Elsewhere the tone important. We’re starting to see lots of top line misses….but also starting to see some outlook cuts and management hinting at slow downs and deterioration in operating enviroment. We head into meat of earnings next week…but so far…it’s felt like in line or a small beat isn’t enough and misses are getting harshly treated…not a great mix.” (Bobby Molavi, GS)
Aggressive
Pretty aggressive acceleration in earnings for the remainder of the year (consensus numbers).
Source: JPM
Earnings revision breadth
Earnings revision breadth is falling.
Source: Morgan Stanley
Tech vs the rest
“Consensus forecasts for tech earnings have risen well above those for the rest of the S&P 500. That’s still playing out: Analysts see tech earnings growing 18% year over year in Q2 versus 2% for the rest of the index”
Source: Blackrock
Small cap earnings
Small cap vs large cap cyclical earnings revision much weaker today than in 2016.
Source: Morgan Stanley
The current bull market has more support from earnings
While the combined market caps of the S&P 500 Information Technology and Communication Services sectors make up 41% of the S&P 500 market cap, matching the 2000 peak, the two sectors currently represent a third of the S&P 500’s forward earnings versus less than a quarter in 2000.
Source: Yardeni
Profit margins – Roaring 20s…
The weekly S&P 500 forward profit margin has climbed to its highest level since June 2022, nearing a new record high.
“We’re expecting realized margins to reach new record highs in the second half of the Roaring 2020s, beginning as early as 2025.” (Yardeni)
Source: Yardeni
