The global EPS cycle continues to improve, with nominal GDP growth continuing to support the cycle
Source: SocGen, TME
Changes in earnings vs changes in prices
By: Brian Feroldi
Is the 60/40 portfolio overvalued?
In August 2021, the combined valuation of overall equities and US Treasuries had reached its most expensive level in 130 years. To put the current valuation imbalance into perspective, its recent peak was a staggering 61% higher than its previous peak in the early 2000s. Although prices have corrected somewhat, particularly in the Treasury market, multiples are still elevated today. Source: Tavi Costa, Bloomberg
The S&P 500 earnings yield minus risk-free cash rate (3-month treasury bill) has dropped to its lowest level (-90 basis points) in 23 years
Source: BofA
ANALYSTS ARE RAISING QUARTERLY S&P 500 EPS ESTIMATES FOR THE FIRST TIME SINCE Q3 2021
At the end of the earnings season for the second quarter, have analysts lowered EPS estimates more than normal for S&P 500 companies for the third quarter? The answer is no. During the months of July and August, analysts increased EPS estimates for S&P 500 companies for the third quarter. The Q3 bottom-up EPS estimate increased by 0.4% (to $56.10 from $55.86) from June 30 to August 31. While analysts were raising EPS estimates in aggregate for the third quarter, they were also increasing EPS estimates for the fourth quarter. The bottom-up EPS estimate for the fourth quarter increased by 0.6%. Source: Factset
Here's a chart showing mentions of "AI" on earnings calls and transcripts
Mentions of "AI" in 2023 have basically broken this chart. We went from ~500 mentions in 2015 to ~30,000 this year and we still have 4 months left. Corporations really want to cash-in on the artificial intelligence hype. Source: Bloomberg, The Kobeissi Letter
$NVDA NVIDIA Q2 FY24 in one chart by App Economy Insight
Nvidia shares climbed 8% in extended trading on Wednesday after the chipmaker beat estimates for the second quarter and issued optimistic guidance for the current period. Nvidia said it expects third-quarter revenue of about $16 billion, higher than $12.61 billion forecast by Refinitiv. Nvidia’s guidance suggests sales will grow 170% on an annual basis in the current quarter. Source: CNBC, App Economy Insight
Earnings season continues!
• Monday: $ZM. • Tuesday: $BIDU, $LOW, $MDT. • Wednesday: $ADSK, $NVDA, $SNOW, $SPLK. • Thursday: $AFRM, $INTU, $WDAY. Source: Earnings Whispers
