🔬Can Revenue Growth Keep The Bears At Bay?

Plus: Nada. I'm still sick.

I’m still getting over this cold so it’s another short one today.

Must Grow Faster

Yesterday I wrote about how some of the popular longs appear to be cooling off, and that I think there is definitely risk that the market is running out of steam. What can keep the hangman at bay?

Growth. More specifically, increasing forecasts for growth. So, how is that big new growth story coming? Umm…not so great.

Of the 500 companies in the S&P 500, so far this year 260 of them (52%) have seen their 2024 revenue estimates lowered. Some in pretty elaborate fashion. Moreover, the average for the index has been a decline of 0.5% since the start of the year.

More than half the companies in the index getting revised lower isn’t a particularly great way to start the year but there is a copper lining: While the ‘average’ company is catching estimate shade, the index itself has actually only seen a de minimis forecast decline due to the bigger companies in the index holding in better than the smaller ones.

The end result is that revenue growth for the index is actually forecast to be pretty solid in 2024: Up +4.8% which is 50% stronger than 2023. The big question is whether or not that’s enough to keep the Index afloat. And the bears at bay.

Thank you for reading StreetSmarts. We’re just starting out so it would be great if you could share StreetSmarts with a friend that might be interested.

Disclaimer (that I totally didn’t steal from another newsletter): The information provided in this newsletter is for informational purposes only and should not be considered as investment advice. The information presented is based on our best understanding of the subject matter at the time of publication. The information contained in this newsletter is not intended to be a comprehensive analysis of any particular topic, and it should not be relied upon as the sole basis for investment decisions. We do not guarantee the accuracy, completeness, or timeliness of the information provided. The financial landscape is subject to change, and the content may not reflect the most current developments. Past performance is not a guarantee of future results, and it is important to conduct thorough research and consult with a financial advisor before making any investment decisions. All investments carry risks, and the value of investments can go up or down. It is essential for readers to understand the risks associated with any financial decisions they make. We may, from time to time, have positions in the securities mentioned in this newsletter, and we may profit from any changes in the value of those securities. However, we do not receive compensation from any companies or individuals mentioned in this newsletter. By subscribing to this newsletter, you acknowledge that you understand and agree to these terms and conditions.