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Stock Market Internals Earnings Momentum, Small/Mid/Large Caps, Growth/Value/Cyclicals, and Additional Factors

May 07 2024

Recession-Like Figures Continue

  • May 7, 2024

The Up/Down ratio is 1.02. This survey of firms, both large and small, continues to tell us that YOY EPS growth isn’t (and hasn’t been) pervasive—despite an economy that, in the aggregate, has remained remarkably resilient.

May 07 2024

Small Cap vs Mid Cap vs Large Cap

  • May 7, 2024

It’s been a year since our Ratio of Ratios matched its pandemic-era maximum discount for Small Caps, at 36%. Since then, the relationship between the two multiples has gone decidedly nowhere, staying in the SC discount range of 22-28%.

May 07 2024

Growth vs Value vs Cyclicals

  • May 7, 2024

Three of the last four years have offered some very divergent returns between the Growth and Value style boxes across all market caps—a 30% spread hasn’t been uncommon. Just over one-third of the way into 2024, there has been little variance between the two styles.

May 07 2024

Additional Factors

  • May 7, 2024

One of the few bright spots for the index in April was Google’s post-earnings jump. The firm held on to most of those gains and ended the month with an 8% advance. This outstanding relative performance catapulted the company back into the 4% Club for the third time in its history. This also marks the first time that four companies have simultaneously shoehorned their way into the 4% Club.

Apr 04 2024

Two Years Underground

  • Apr 4, 2024

The Up/Down ratio is 1.14. Looking at the history of data, such a stretch of well-below-average readings should have either spiked higher on an economic upswing by now, or plunged even lower with a recession. The soft landing of 2015-16 posted four quarters of figures below 1.20—the current run has doubled that streak.

Apr 04 2024

Small Cap vs Mid Cap vs Large Cap

  • Apr 4, 2024

Our Ratio of Ratios is unchanged from last month, as both Large- and Small-Cap indices posted similar results in March. If earnings remain the same, Large and Small Caps, alike, would need to rise another 10% to match the contemporary, absolute P/E peak set at the end of 2021.

Apr 04 2024

Growth vs Value vs Cyclicals

  • Apr 4, 2024

Mega Cap Growth’s excellent start to the year hit a snag in March: The Royal Blue Growth Tier was the only style box in the red. Outside of Small Caps, Growth and Value flavors returned similar results in Q1 (+8% to +10%).

Apr 04 2024

Additional Factors

  • Apr 4, 2024

The Magnificent Seven was trimmed to the Fab Four in Q1 as NVDA (+82%), META (+37%), AMZN (+19%), and MSFT (+12%) beat the overall S&P 500 and contributed just under half of the index’s total return for the quarter. We’ll score GOOGL a bogey (+8%), with AAPL (-11%) and TSLA (-29%) really making a mess of it. Heck, TSLA was the worst performing stock in the entire S&P 500 in Q1—nothing magnificent about that!

Mar 07 2024

From Abysmal To Awful

  • Mar 7, 2024

Our Up/Down ratio reads 1.06 for the second month of Q4 results. That is a vast improvement from the take-away-your-shoelaces “one-month” reading of 0.66. The current ratio lands toward the bottom of our depressing eight-quarter range of “two-month” figures.

Mar 07 2024

Small Cap vs Mid Cap vs Large Cap

  • Mar 7, 2024

In February, the S&P 500 outperformed the S&P 400 by 2%, helping to widen our Ratio of Ratios by a congruent amount. Currently, the meandering Small Cap discount sits right at both its one- and two-year moving averages.

Mar 07 2024

Growth vs Value vs Cyclicals

  • Mar 7, 2024

Growth continued its fantastic start to the year with Royal Blue Growth +10% YTD. That gain has bolstered the median P/E multiple of this Mega-Cap proxy to 42x—near its contemporary high of 45x recorded at the end of 2021.

Mar 07 2024

Additional Factors

  • Mar 7, 2024

If you happened to be in the business of producing or consuming A.I. chips (NVDA +60%, META +38%) you’ve done very well in 2024 thus far. Also, if one’s business model revolves around the negation of chips—potato or tortilla—this year has been very kind to you (LLY +29%). Those three firms, not necessarily the first names to come to mind to swing the index, have accounted for more than 40% of the S&P 500’s YTD upside.

Feb 07 2024

Earnings Momentum

  • Feb 7, 2024

Our Up/Down ratio reads 0.66—a terrible start to Q4 reports; only five prior “one-month” readings were worse than today’s: Q2-2020 and every quarter of 2009. Despite present day economic conditions seemingly quite a bit different than in those five previous cases, roughly the same percentage of firms are failing to beat EPS of twelve months ago.

Feb 07 2024

Small Cap vs Mid Cap vs Large Cap

  • Feb 7, 2024

After a scorching December for the S&P 600 (+13%), the small cap index underperformed both the Equal- and Cap-Weighted S&P 500 in January. Interest rates—not valuations—seem to be in full control of the situation, as small caps patiently wait for rates to move lower.

Feb 07 2024

Growth vs Value vs Cyclicals

  • Feb 7, 2024

At the end of 2023, market breadth finally widened. That short run came to an end in January as the momentum champ of 2023—Large Cap Growth—was back in control.

Feb 07 2024

Additional Factors

  • Feb 7, 2024

The semiconductor stock is now within spitting distance of becoming the eighth firm ever to enter the prestigious 4% Club (achieving a 4% weight in the S&P 500). Over the last four years, NVDA has posted a return of +945%, pushing its index weight from 0.54% to 3.74%. The stock’s 24% gain in January contributed nearly half of the S&P 500’s +1.6% monthly return.

Jan 06 2024

Earnings Ratio in Depressing Range

  • Jan 6, 2024

With the books closed on Q3-23 reporting, the ratio reads 1.16—right in the middle of the depressing range captured over the past two years. This equal-weighted all-cap vignette is still flashing a warning sign about companies’ ability to grow their bottom lines.

Jan 06 2024

Small Cap vs Mid Cap vs Large Cap

  • Jan 6, 2024

Our preferred earnings measure, five-year normalized EPS, has grown from $145 to $171 over the last two years. The S&P 500’s Normalized P/E multiple has dipped from 32.9x to 27.9x since the end of 2021. Those two figures are good for the 94th and 81st percentiles, respectively, in our 1995-present data set.

Jan 06 2024

Growth vs Value vs Cyclicals

  • Jan 6, 2024

Royal Blue Growth (+40%) led all of our style boxes in 2023. However, this mega-cap proxy still hasn’t recovered all of its losses from 2022.

Jan 06 2024

Additional Factors

  • Jan 6, 2024

The story of the year was the Magnificent 7. Even with a lackluster December, the largest seven firms produced an average return of +111% in 2023. Advances in those companies added $5 trillion in market cap and were responsible for just under two-thirds of the S&P 500’s overall gain.