S&P outlook hanging on a hope and a prayer

Investment Analysis Clubs Macro Economic Trends and Risks
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In the latest episode of Barron’s Streetwise podcast, Jack Hough highlights the increasingly delusional ‘great expectations’ for S&P growth despite serial evidence to the contrary

'So the estimate is for 3% growth for the S&P500 in the first quarter. That’s the consensus. That is down from over 10% last summer.

JP Morgan says it’s all Mag 7 - the not so magnificent 493’s Q1 growth will be -2.6%, the fifth such negative growth quarter in succession.’

Of course the Mag 7 moniker is now well past its use by date, thanks partly to Tesla and Apple

So the mega-drivers of S&P earning growth are beginning to drop out of the race even as the vast majority of its component companies suffer from serially declining earnings growth

Who cares about silly fundamentals? Bash on, regardless

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The P/E ratio of the equal-weight S&P 500 index (RSP) is 15.1. Not particularly cheap, but not very expensive either.

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That’s because RSP hasn’t overweighted the rapid price increases of the so-called “Magnificent Seven” that drove the SPX and QQQ. An investor could consider the slower growth of RSP disappointing or reassuring, depending on their perspective.

Wendy

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Stocks go up and down, but the money you lose to fees, commissions, trading costs and taxes is gone forever.

Trading in and out of the market based on inflation, interest rates or PE ratios is a fool’s game.

intercst

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Back in the day, J.P. Morgan analysts were called “The Wise”

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