Why a Recession is Back in Play and What it Means for Stocks
The market is tumbling on the compounded effect of cooling inflation and reinvigorated recession fear. The July CPI report set the market into motion, leading it to believe that interest rate cuts are coming, sparking a sector rotation that is evolving into a major stock market meltdown.
SPY: 4 Reasons To Exercise Prudence
The economic picture is not as rosy as the FED proclaims.
What The Expectation Breaker For The S&P 500 Told Us
A follow-through day sets up a certain expectation. When expectations are broken, it requires swift action.
SPY: Don't Be The 'Greater Fool'
The inverted yield curve in recent months hasn't led to a recession yet, possibly due to big tech companies' influence and other reasons. However, the leading economic indicators are worsening - never before have the LEIs declined for so long without a recession.
SPY: Good, But Not The Best
SPY ETF is an index fund loved by many for good reasons. However, I do believe that the S&P 500 has several hurdles to cross given the current economic situation. In addition, there are many alternatives to SPY ETF which offer more portfolio diversification and/or cost efficiency.
SPY: Q2 Earnings And Rate Cut Probability Improved Its Return Outlook
Since my previous writing, SPY has become more attractively valued with an unchanged CAPE ratio but lower real interest rates. More importantly, the probability of interest rate cuts in 2024 has dramatically increased. Meanwhile, the Q2 earnings forecast points to double-digit annual EPS growth from the underlying companies.
SPY: Prematurely Priced For A 'Soft' Landing
Amid "goldilocks" economic data in the first half of 2024, Mr. Market has priced a "no" landing scenario into the equity markets. However, rising unemployment and impending yield curve uninversion threaten to break the "soft/no" narrative. The top-heavy market rally off of 2022 lows has been driven by P/E multiple expansion. If we get a hard landing (recession), S&P 500 investors are set up for a rude awakening.
Q2 Earnings: Where Street Estimates Are Too Low & Who Should Beat
24% of S&P 500 companies have Street Earnings lower than Core Earnings in TTM ended 1Q24. 8% of S&P 500 companies have Street Earnings understating Core Earnings by more than 10% in 1Q24. Analysis based on ~3,000 10-Ks and 10-Qs filed with the SEC for 1Q24 results shows that when Street Earnings are understated, it's by an average of 16%.
Investing Less Than $200 Per Month in This ETF Could Create $10,000 in Annual Dividend Income Within 25 Years
An investing strategy doesn't need to be complicated, and it can be as easy as putting money into the same fund every month. Investors can minimize their overall risk by mirroring the markets.
SPY: Data Indicates That There Is Little Potential For Appreciation
Anyone who invested in the S&P 500 in recent years made a great choice, with American companies becoming increasingly relevant in the world. However, different statistical data show the same scenario, with little potential for additional appreciation. In terms of price, analyzing the P/E there is more reason to believe that the market presents an unattractive risk-return ratio.
Analysts and Earnings Propel the S&P 500's Continuous Growth
The S&P 500 NYSEARCA: SPY can continue to climb its wall of worry because its foundation is built on earnings growth. The bricks are made from FOMC and inflation news bites, which sustain a low level but subsiding fear.
SPY: Higher Multiples Are Justified
The S&P 500's PE multiple at fair value has been rising due to central banks monetizing excessive debt, since the GFC. Tech mega-cap dominance too has caused the S&P 500 PE at fair value to rise, influenced by global liquidity and monetary policy. By the end of 2025, SPY's fair value will likely be in the low to mid $600s due to global liquidity picking up.
