The Wall Street consensus forecast for 2026 earnings growth is strong by historical standards. Analysts are giddy and projecting another year of double-digit growth in S&P 500 earnings per share (EPS). FactSet’s most recent data showed an expected 2026 earnings growth rate for the S&P 500 of about 15 percent. That is well above the […]
Every January, it happens like clockwork: you drive by gym parking lots that look like a Taylor Swift concert. Go to the store, and the salad aisles are ransacked like there’s a lettuce shortage, and half of your coworkers suddenly start quoting Warren Buffett while buying stock in companies they can’t spell. You got it, […]
Assessing a bear market rally proves challenging when you experience it firsthand. Only in hindsight does the complete picture reveal itself to investors. Of course, after a bear market rally, investors tend to review their investments and speculate on what they should have done differently. Retail investors seem to view the recent sharp correction as […]
“Resistance is futile” was a sentence that struck fear in the hearts of Trekkie fans during “Star Trek: The Next Generation,” specifically in both of the “Best Of Worlds” and “First Contact” episodes. In those episodes, the “Starship Enterprise” crew encountered a species called the “Borg.” The Borg’s primary purpose was to achieve “perfection” by assimilating other beings […]
Despite the recent rally, the correction continues. While wanting to “buy the dip” is tempting, the technical damage is enough to warrant remaining cautious in the near term. As we have discussed, managing risk requires discipline and the emotional ability to navigate more volatile markets until a more straightforward path for risk-taking emerges. The problem […]
In financial markets, few technical patterns generate as much attention and anxiety as the death cross. This ominous-sounding term refers to a crossover on a price chart when a short-term moving average, most commonly the 50-day moving average (50-DMA), drops below a long-term moving average, usually the 200-day moving average (200-DMA). The “death cross” is a fantastic […]
In November last year, I discussed the importance of yield spreads, historically the market’s “early warning system.” To wit:“ “Yield spreads are critical to understanding market sentiment and predicting potential stock market downturns. A credit spread refers to the difference in yield between two bonds of similar maturity but different credit quality. This comparison often […]
Last week, we noted that “nothing good happens below the 200-DMA,” and the tariff-induced market crash this week confirmed that. However, we also noted that over the last 30 years, previous failures at the 200-DMA have also often been buying opportunities. That is, unless some “event” of magnitude creates a massive shift in analysts’ estimates. “For this […]
A Wall Street axiom states that the stock markets lead the economy by about six months. While not a perfect predictor, the stock market reacts to investor expectations about future corporate earnings, economic activity, interest rates, and inflation. When sentiment shifts due to anticipated weakness in any of these areas, equity prices often decline, reflecting […]