(Click on image to enlarge)Equity futures indicate the market could give back some of its recent gains when it opens later this morning. On the one hand, investors will be digesting quarterly earnings beats from General Motors (), PulteGroup (), 3M(), GE Aerospace (), Danaher (), and others. Other higher-profile earnings reports on deck this morning include those from Lockheed Martin (), and Norfolk Southern (). Coming into this week, consensus 2H 2024 EPS for the S&P 500 was revised lower yet again, rising just 5.3% compared to 1H 2024. Back in July, that expectation was above 11%, but the US economy is also on far stronger footing than was thought at that time. With only a few September data points remaining, the Atlanta Fed’s rolling GDPNow model iscalling for 3Q 2024 at 3.4% compared to 2.0% in mid-August. That suggests those EPS expectations for 2H 2024 may have been a tad excessive for some parts of the economy. While potentially good for the current earnings season, that stronger economy is leading traders to pare back bets on aggressive easing by the Federal Reserve. More cautious comments from Fed officials over the pace of future rate decreases are also influencing this latest rate cut cadence re-think. That includes Minneapolis Federal Reserve President Neel Kashkari hinting yesterday the central bank may take a more modest approach from here.We have just a few more Fed speakers between today and tomorrow, but the latest edition of the Fed’s Beige Book out tomorrow afternoon, and Thursday morning’s Flash October PMI data from S&P Global (SPGI) will provide the next snapshot of the economy. Should they bring more evidence of a strengthening economy, the more likely we’ll see the 10-year Treasury yield tick higher, rate cut expectations slow, and a valuation-stretched stock market sag.More By This Author:The VIX, Treasuries, And EarningsStocks Look To Claw Back Recent Losses, But…Earnings Bring Consumer Health Updates
The US Economy – Good For Earnings But…
