Trump's Son-In-Law Back In Political Arena? Jared Kushner Reportedly Making Calls To Potential Donors To Attend Ex-President's New York Fundraiser For 2024 Run

In the past two months, there have been a lot of economic and market distractions, but market fundamentals remain strong.

More Evidence the Market Sell-Off was Sentiment Driven As I write, over 95% of S&P 500 companies have reported earnings for the second quarter, and the overall results were solid. Total earnings for the group were up 8% year-over-year on 5.1% higher revenues, and Zacks Investment Research expects those figures to adjust upward once all the results are in. Approximately 80% of companies beat their earnings-per-share estimates for the quarter.1 In previous quarters, many investors have correctly attributed positive earnings growth to mega-cap technology companies, specifically the “Magnificent 7.” These companies are still posting strong earnings growth, at 30% for the second quarter. But profit generation is notably widening, with the “other 493” stocks in the S&P 500 posting positive earnings growth in Q2 2024 for the first time in five quarters, at 7%. I could see this earnings gap narrowing in the coming quarters as well, which as an aside I think makes a strong case for broad diversification in equity portfolios right now. Don't Miss These Market Insights! To help you stay ahead in today’s unpredictable market, I invite all readers to explore Zacks’ Stock Market Outlook Report 2, which offers key insights into important market factors, such as: Capital markets commentary: Is the S&P 500 too concentrated? Key U.S. economic data Global market data Zacks S&P 500 earnings insights Zacks sector picks And more… Get the insights you need to act confidently and safeguard your investments before the market shifts further. If you have $500,000 or more to invest, request our free Stock Market Outlook Report 2 today! Overall, this level of corporate earnings growth is the best we've seen since the first quarter of 2022, and as seen on the chart below, the aggregate earnings total for the last quarter is on track to set a record. In short, U.S. companies have never generated this level of earnings at any point in history. Total S&P 500 Quarterly Earnings (Billion $) Yet few in the financial media are talking about it. Over the past two months, there have simply been too many economic and market distractions (and for many, political distractions as well). As the second quarter earnings season was in full swing, financial media was gripped by the sharp sell-off tied to the yen carry trade, which saw investor sentiment swing sharply negative. Then, expectations kept moving lower with the release of the weak jobs report in July, which added to investor unease and likely fueled volatility. The result was that instead of talking about earnings estimates for the next year and the expectation of 10+% year-over-year earnings growth in the fourth quarter, financial media and many investors were focused on the unemployment rate ticking higher to 4.3% and the possibility of a hard landing. The strong earnings season was lost in the shuffle. In my view, these are not the conditions I’d flag as a potential bear market. What I’m looking for, generally speaking, is a deterioration in earnings or other economic fundamentals as investor sentiment is too optimistic and/or swinging positive, which is the opposite of what we're seeing now. As seen in the chart below, Zacks is expecting strong relative earnings growth for the next few quarters, which is likely to correspond with more economic growth and falling interest rates—all while investor sentiment has reset lower. I think that's bullish. Quarterly Earnings and Revenue Growth Rate (YoY) Market prognosticators have also been warning—for the better part of a year—that the U.S. consumer was running out of steam, which in my view has contributed to souring investor attitudes about the market. But July retail sales data, released in August, told a different story. Retail sales rose at a seasonally adjusted 1% in July compared to June, when retail sales had declined -0.2%. Source: Federal Reserve Bank of St. Louis 3 Spending rose across almost all goods-related categories, with strong vehicle sales being accompanied by rising purchases at grocery stores, electronics stores, and online. Pervasive fears that a slowing jobs market and rising delinquencies were pinching consumers have not been realized to date, which underscores the gap between negative sentiment and positive fundamentals. That is a setup that investors would like to see, in my view. Bottom Line for Investors Looking at earnings expectations on an annual basis, full-year S&P 500 earnings for 2024 are expected to be up +8% on +1.8% revenue growth. And if we exclude the Energy sector drag, whose earnings are expected to be down -11.8% for the year, total earnings for the rest of the index would be up +9.6%. Simply put, these figures are not currently reflected in investor attitudes about the market, which tells me that the wall of worry remains firmly intact—a bullish sign for the balance of the year. To help you capitalize on these opportunities and stay ahead in the current market conditions, I'm offering all readers our comprehensive Stock Market Outlook Report 4. This report includes a detailed analysis and actionable insights to ensure you remain aligned with your investment Capital markets commentary: Is the S&P 500 too concentrated? Key U.S. economic data Global market data Zacks S&P 500 earnings insights Zacks sector picks And more… If you have $500,000 or more to invest, request our free Stock Market Outlook Report today! About Zacks Investment Management Zacks Investment Management was born out of one of the country’s largest providers of independent research, Zacks Investment Research. Our independent research capabilities from our parent company truly distinguish us from other wealth management firms - our strategies are derived from research and innovation, including the proprietary Zacks Rank stock selection model, earnings surprise and estimate revision factors. At Zacks Investment Management, we work with clients with $500,000 or more to invest, and we use this independent research, 35+ years of investment management experience, and tools we’ve developed to design customized investment portfolios based on each client’s individual needs. The end result is investment management that is research driven, results oriented and client focused. Talk to a Zacks Wealth Advisor today. © Zacks Investment Management  |  Privacy Policy 1 Zacks.com. 2024. 2 Zacks Investment Management reserves the right to amend the terms or rescind the free-Stock Market Outlook Report offer at any time and for any reason at its discretion. 3 Fred Economic Data. August 15, 2024. 4 Zacks Investment Management reserves the right to amend the terms or rescind the free-Stock Market Outlook Report offer at any time and for any reason at its discretion. DISCLOSURE Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Any projections, targets, or estimates in this report are forward looking statements and are based on the firm's research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation. Certain economic and market information contained herein has been obtained from published sources prepared by other parties. Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein. The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor's. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. An investor cannot invest directly in an index. The Russell 1000 Growth Index is a well-known, unmanaged index of the prices of 1000 large-company growth common stocks selected by Russell. The Russell 1000 Growth Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. Nasdaq Composite Index is the market capitalization-weighted index of over 3,300 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests. The index includes all Nasdaq-listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debenture securities. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. The Dow Jones Industrial Average measures the daily stock market movements of 30 U.S. publicly-traded companies listed on the NASDAQ or the New York Stock Exchange (NYSE). The 30 publicly-owned companies are considered leaders in the United States economy. An investor cannot directly invest in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. The Bloomberg Global Aggregate Index is a flagship measure of global investment grade debt from twenty-four local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. The ICE Exchange-Listed Fixed & Adjustable Rate Preferred Securities Index is a modified market capitalization weighted index composed of preferred stock and securities that are functionally equivalent to preferred stock including, but not limited to, depositary preferred securities, perpetual subordinated debt and certain securities issued by banks and other financial institutions that are eligible for capital treatment with respect to such instruments akin to that received for issuance of straight preferred stock. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. The MSCI ACWI ex U.S. Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries (excluding the United States) and 24 Emerging Markets (EM) countries. The index covers approximately 85% of the global equity opportunity set outside the U.S. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. The Russell 2000 Index is a well-known, unmanaged index of the prices of 2000 small-cap company common stocks, selected by Russell. The Russell 2000 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. The S&P Mid Cap 400 provides investors with a benchmark for mid-sized companies. The index, which is distinct from the large-cap S&P 500, is designed to measure the performance of 400 mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment. The S&P 500 Pure Value index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest value characteristics by using a style-attractiveness-weighting scheme. An investor cannot directly invest in an index. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. Zacks Investment Management 10 S. Riverside Plaza Suite 1600 Chicago, Illinois 60606-3830 If you do not wish to receive further email solicitations from Zacks on behalf of its partners, please click here to unsubscribe.