Quick reminder and hello from 35,000 feet
Good morning! 👋
Noriko and I are winging our way home to Japan for some long-overdue and much-needed family time.
I will be watching the markets carefully and, as always, be in touch with anything requiring your immediate attention. I’ll also be posting via X fka Twitter (@fitz_keith) and via Instagram (keith.fitz.gerald) if you’d like to keep up with our adventures vicariously.
This week’s market action will be all about the headlines.
We’re largely through earnings, so most of what you read will likely be “what could happen” stories or even “why this might” stories—as in, this company could fall by X% or XYZ might make the markets do PDQ. And, as such, it’s nothing more than eye candy intended to attract eyeballs.
Instead, focus on what’s “likely” to happen, especially when it comes to the world’s best companies, which are still putting up great numbers, raising guidance, and boosting profits.
99% of S&P 500 companies have reported
79% of them have reported positive EPS surprises
64% have reported positive revenue surprises
Critics will waste no time telling you that the blended earnings rate is negative or that P/E ratios are still higher than average.
If this is something that makes you nervous—I get it—just also keep in mind that this quarter is the first increase in the bottom-up EPS estimate over the first two months of a quarter since Q3 2021.
Why does this matter?
Because of something we’ve talked about many times over the years.
Earnings typically turn several months ahead of markets and sentiment... which means, when you think about it, that the markets could be getting ready for another leg higher after the current bout of selling is done and big traders are convinced the weak money has been shaken out of the game.
Remember—the short-term lottery mentality that’s taken over financial markets lately does NOT interfere with the case for long-term investing, particularly when it comes to companies making “must have” products and services the world cannot live without.
Every day is a new opportunity.
You got this.
As always, let’s MAKE it a great day!