Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today
Already have an account? log in
Can The ‘Everything Rally’ Continue? McElligott Weighs In
Stocks are a bit of a sideshow right now. It's all about bonds.
Indeed, equities are beholden. "Treasurys were definitely the driver and the S&P 500 was the passenger that just went along for the ride," JonesTrading's Mike O'Rourke wrote, of last week's price action.
The sharp bond rally that began with Treasury's refunding announcement and continued unabated through payrolls helped US stocks post their best week in a year.
The last comparable weekly rally for US equities was likewise c
Where do we go from here? This market lacks reasons to commit in either either direction right now. Seems like a hedger’s bad dream. I’m sympathetic. It seems to be an environment with a fair amount of darkness and discomfort for most investors. I’m quite anxious myself about the next two quarters and what the earnings will bring with the financial and global mess we’re in.
With earnings almost done (81% of S&P500 reported) only 39% have seen 4Q revenue estimates go up, and only 33% have seen 4Q EPS estimates go up.
I also read that 4Q EPS estimate cut in October (bottoms up S&P500 estimate) was larger than during the first month of a quarter (i.e. earnings season) than any quarter since 2Q2020. (Cuts were -0.3% to -0.7% in 1Q2022-2Q2022, -3.2% to -3.6% during 3Q2022-1Q2023, -0.1% to -0.8% in 2Q2023-3Q2023, now -3.9% so far for 4Q2023.)