Earnings Season Arrives: 2024 Expectations Are Key

The markets may have started 2024 with a mild pullback (expected after two very strong months), but with global liquidity growing at mid teens rates as we discussed in last week’s call, the path of least resistance for investment asset prices is higher.  We expect the economy and markets to find their footing and move higher.  Earnings season could be the trigger. 

Over the next three weeks, U.S. stock market activity will likely be dominated by Q4 2023 corporate profit reports.  Interestingly, earnings expectations for Q4 2023 were consistently lowered as 2023 progressed, thus lowering the bar.  These backward looking earnings numbers are not what is important.