😱 The shocking chart of the day >>> S&P 500 COMPANIES EARNINGS GROWTH DOES NOT EXIST WITHOUT MAGNIFICENT 7😱
In 5 out of the last 6 quarters, the S&P 500 excluding Magnificent 7 profit growth has been negative. It is estimated the Mag 7 net income will grow by 18% in Q3 2024 while the other 493 firms by 1%. Note however 2 changes in trend: 1) The Mag 7 eps growth is slowing down (from a high base); The non-Mag 7 EPS growth is picking up (and turning slightly positive) from a low base. Sometimes the second derivative is more important than the absolute number. Time will tell... Source: The Global Markets Investor
BofA: “today the average EPS growth rate among AI ETF constituents has fallen from 18% to just 5%, below the S&P 500.”
Source: Mike Zaccardi, CFA, CMT @MikeZaccardi via @dailychartbook
Yen's strength pressures earnings
Source: Bloomberg
EBITDA is NOT Free Cash Flow
Source: Brian Feroldi
Is the US regional bank crisis worsening?
Summit State Bank's Q2 Earnings Plummet. Q2 2024 Net Income: $928,000 Drops -67% from Q2 2023 Net Income $2,985,000. Earnings Decline: 69%. Stock Drop: -15%. $SSBI. Source: The Coastal Journal
A solid rise in ISM Service dampens growth scare in markets a bit and is another sign that we are currently facing a technical
positioning driven correction instead of one led by hard landing fears. The main ISM services index and orders recorded solid bounce. Meanwhile, the Employment Index is up to highest level for the year. Note that the ISM has been quite volatile and should this not be overemphasized. Nevertheless, it seems premature to call a recession at this stage. Consider that earnings are up 12% YOY vs consensus of 9%. That doesn't happen at a Recession turning point. Source: Rishi Mishra, Ram Ahluwalia
This is the biggest 2-day drop for the Nikkei in history, surpassing Black Monday
Source: www.zerohedge.com, Bloomberg
US earnings: The beat rate is the smallest since 4th quarter of 2022 377 S&P 500 companies (80% of index EPS) have reported, beating consensus by 2%, the smallest since 4Q22.
71%/55%/45% beat on EPS/sales/both Source: BofA, Mike Z.
