Good News Bad News

The Bad News

• Historically, September is the worse month of the Year

• If Oil holds above $83.50, it could trade at $95. This would re-accelerate Headline Inflation

• Consumer Credit Card Debt Hit record highs...Will Spending Collapse?

• Credit Card Rates Hit 38y Highs...Will Spending Collapse?​

• The Bond market is close to falling apart as Fed & U.S. Treasury sell more Bonds (Lower Treasuries = Higher Rates)

• The Further 30y-Treasury Bonds Fall, the Higher 20y Rates rise (above 4.5% would crush mortgage demand & crush Risk Assets.

The Good News on Earnings

• 65% of S&P 500 companies reported revenues above estimates.
• Companies' revenues are 1.6% above forecasts on average.
• The blended year-over-year revenue growth for Q2 2023 is 0.6%, the lowest since Q3 2020.
• 7 of 11 sectors show revenue growth, led by Consumer Discretionary and Financials.
• Four sectors report a revenue decline: Energy, Materials, and Health Care.

• 79% Beat EPS estimates, the highest since Q3 2021.
• Earning beats are 7.2% above forecasts on average.
• 8 of 11 sectors have shown earnings growth, led by Consumer Discretionary and Communication Services.
• 3 of 11 sectors report a decline in earnings: Energy, Materials, and Health Care.

• Analysts expect earnings growth of 0.2% for Q3 2023 and 7.6% for Q4 2023.
• For the entire CY 2023, analysts predict earnings growth of 0.8%.

• The forward 12-month P/E ratio is 19.2, higher than the 5-year and 10-year averages.
• 34 S&P 500 companies (including one Dow 30 component) will report results for Q2 2023 in the upcoming week.

The Good News for Investors 

• The Bull Market Rally continues to Expand 

• Core Inflation is decelerating 

• The Fed is increasingly Optimistic about the Economy and Dovish in their Policy language.

• Disposable Income is well above Core Inflation...Consumers can keep Spending.

• Interest payments are elevated but so are Interest income on assets

The Good News for the Economy

• Above 50, Services continue to carry economic growth
• Below 50, Manufacturing continues to drag goods inflation lower

• Beneath The Surface, Manufacturing Costs are Cooling

​Beneath The Surface - New Orders are bottoming ​

• GDP revised up again

The Good News in the Jobs Market

• Payrolls/Jobs came in below expectations suggesting "economic cooling." 
• Payrolls/Jobs continue to rise well above 0, suggesting the economy is far from recession.

• Unemployment remains at historic Lows...Consumers have Jobs

• Average Hourly Earnings (YoY) came in hotter than expected, sticking around 4.4% for the 5th month in a row...Sticky wages help Spending.

U.S Dollar Tailwind

If the Dollar Continues on it's downward path, Stocks shouold regain the uptrend.

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