Do Not Ignore Seasonal Trends

May 13, 2024

Market Recap – Markets Up on Strong Q1 Earnings Results

It was another positive week for equity investors, with the DJIA turning in its best weekly gain since December and its 4th consecutive weekly gain. Meanwhile, the S&P 500 recorded its 3rd consecutive weekly gain and is within striking distance of its all-time high.

It was also a relatively light trading week and there were not too many economic data sets for Wall Street to obsess over, other than jobless claims, wholesale inventories, consumer credit, and consumer sentiment.

The last three data sets were mostly negative while jobless claims came in better than expected, but none of these releases really moved the market at all. Instead, it seemed to be a solid corporate earnings season that bolstered Wall Street all week.

Specifically, with 92% of S&P 500 companies reporting actual results for 1Q2024, 78% of those have reported a positive EPS surprise and 59% have reported a positive revenue surprise according to research firm FactSet.

On a year-over-year basis, the S&P 500 is reporting its highest earnings growth rate since Q2 2022. Overall, 92% of the companies in the S&P 500 have reported actual results for Q1 2024 to date.

Of these companies, 78% have reported actual EPS above estimates, which is above the 5-year average of 77% and above the 10-year average of 74%. In aggregate, companies are reporting earnings that are 7.5% above estimates, which is below the 5-year average of 8.5% but above the 10-year average of 6.7%.”

Weekly Chart Review


What’s Going On In Your Portfolio?

Market rotation and seasonal trends have favored value stocks, such as Utilities.

During the pullback in April, client portfolios re-entered the market to take advantage of these trends.

Historically, during election years the S&P 500 tends to rise during the Summer months. Barring any surprises from the Fed and/or inflation data, I am expecting this year to be no different.

I will continue to keep volatility-based stops in place, in case inflation data spooks the market again.



Upcoming Economic Data to Keep an Eye On

Source: Trading Economics


By John Rothe, CMT

Founder & Chief Investment Officer

Riverbend Investment Management

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