Avoid Gazing Directly at the Earnings Eclipse

• Growth in earnings, a driver of long-term stock market performance, appears to be spreading beyond the Magnificent 7 (Mag 7).
• According to the FactSet-tracked consensus of analysts’ earnings projections, the Mag 7’s earnings growth is likely to slow down during the remainder of the year and fall behind the rest of the global stock market by the fourth quarter.
• Several Mag 7 stocks have already experienced setbacks, as both Apple and Tesla have incurred losses to start the year
• There is potential for broader market performance to be supported by a reversal in relative earnings growth.

Sources

1. Charles Schwab & Co., Inc and Factset data as of 4/1/2024. https://twitter.com/JeffreyKleintop/ status/1777320497115808212?s=20&utm_source=substack&utm_medium=email