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Commentary
As we move into the start of the second quarter earnings announcement season later this week, we are locked and loaded for another great earnings announcement season. After all, the second quarter was the best-performing quarter for both the NASDAQ Composite and the S&P 500 in the past six years, so expectations remain high, since economic growth is clearly accelerating. My favorite economist, Ed Yardeni, pointed out we are in the midst of a FOMO (Fear of Missing Out) market, and industry analysts are estimating the S&P 500 will post 26.1% annual earnings growth for 2026 and then +17.8% for 2027.
Since fundamentally superior stocks in our portfolio are not appreciating as fast as their underlying earnings, their price/earnings (P/E) ratios are being compressed. The stock market should be strong this summer due to wave after wave of positive earnings announcements in upcoming weeks – and the rest of this year. Also, due to rising household wealth for the 50% of Americans in the stock market, some of this “wealth effect” is expected to filter down and help boost prosperity for all Americans, as the velocity of money increases….
As we move into the start of the second quarter earnings announcement season later this week, we are locked and loaded for another great earnings announcement season. After all, the second quarter was the best-performing quarter for both the NASDAQ Composite and the S&P 500 in the past six years, so expectations remain high, since economic growth is clearly accelerating. My favorite economist, Ed Yardeni, pointed out we are in the midst of a FOMO (Fear of Missing Out) market, and industry analysts are estimating the S&P 500 will post 26.1% annual earnings growth for 2026 and then +17.8% for 2027.
Since fundamentally superior stocks in our portfolio are not appreciating as fast as their underlying earnings, their price/earnings (P/E) ratios are being compressed. The stock market should be strong this summer due to wave after wave of positive earnings announcements in upcoming weeks – and the rest of this year. Also, due to rising household wealth for the 50% of Americans in the stock market, some of this “wealth effect” is expected to filter down and help boost prosperity for all Americans, as the velocity of money increases….
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