The Magnificent 7 (Mag-7) make up about one-third of the S&P 500’s total market value and have been the main contributors to earnings growth in recent quarters. For example, in 2023, S&P 500 earnings grew by 4.1%, but when we exclude the Mag-7, growth fell to -1.3%. While the Mag-7 are still expected to post strong earnings growth in the quarters ahead, their relative contribution to overall S&P 500 earnings growth is expected to decline, with the rest of the index (S&P 493) playing a larger role heading into 2025. To illustrate this, Mag-7 earnings are expected to rise 17.1%

Market Performance Most developed markets rose in November on an equal-weight basis, apart from Europe, while most Emerging Markets fell.  U.S. saw the strongest performance with prices rising by +9.3%, while Europe declined by 1.0%.  Emerging Market underperformance was led by Korea (-5.3%), followed by Brazil (-2.8%), and Taiwan (-1.4%).  China saw prices rise by 2.5%. Long-Short Performance Looking at top-bottom decile spreads for November, Analyst Revision Model (ARM) and Value-Momentum (Val-Mo) were amongst the strongest performing models with positive decile spreads in most regions. Brazil and Korea saw the strongest breadth, with positive decile spreads across all models in

To date, 181 of the 199 companies in our Retail/Restaurant Index have reported their EPS results for Q2 2024, representing 91% of the index. Of those companies that have reported their quarterly results, 72% announced profits that beat analysts’ expectations, while 4% delivered on-target results and 24% reported earnings that fell below estimates. The Q2 2024 blended earnings growth estimate now stands at 14.4%. The blended revenue growth estimate for the 199 companies in this index is 3.7% for Q2 2024. Of those companies that have reported their quarterly results so far, 51% announced revenue that exceeded analysts’ expectations and

To date, 158 of the 199 companies in our Retail/Restaurant Index have reported their EPS results for Q2 2024, representing 79% of the index. Of those companies that have reported their quarterly results, 72% announced profits that beat analysts’ expectations, while 4% delivered on-target results and 24% reported earnings that fell below estimates. The Q2 2024 blended earnings growth estimate now stands at 13.9%. The blended revenue growth estimate for the 199 companies in this index is 3.6% for Q2 2024. Of those companies that have reported their quarterly results so far, 49% announced revenue that exceeded analysts’ expectations and

Global equities rallied in developed markets on an equal-weight basis in July but fell in most emerging markets. The U.S. saw the largest gain (+6.6%) followed by U.K. (+5.5%), Australia (+5.4%), Singapore (+4.7%), and Canada (+3.9%). Hong Kong saw prices fall by 4.5%, while Japan saw a decline of 1.6%.  Korea, China, and Taiwan saw prices fall by 3.2%, 1.8%, and 1.5%, respectively. Looking at top-bottom decile spreads for July, Price Momentum (PMO), Relative Value (RV), and Value-Momentum (Val-Mo) performed well in most markets. Intrinsic Value (IV) underperformed in most markets, most notably in Brazil, Developed Europe and U.K.  In

Despite continued inflation, the consumer wants to celebrate the spooky season. Online Halloween merchandise is selling out on par with last year’s level, and faster than the pandemic and pre-pandemic levels. Given the mix of discounts, it looks like retailers might be able to maintain healthy margins. Moreover, the LSEG I/B/E/S and StarMine data indicate that candy makers Hershey and Mondelez International are better poised to do well during this trick-or-treating season, despite higher cocoa prices. Halloween discounts In collaboration with Centric Market Intelligence, LSEG discovered that the discount penetration, which means the percentage of Halloween-related costumes and accessories on

Federal Reserve Chairman Jerome Powell has been consistent in his mantra of ‘higher for longer’ interest rates, while U.K. Governor Andrew Bailey has warned that it is ‘very premature’ to lower interest rates. While both banks share a similar view of higher for longer, the impact to the local housing market has been remarkably different. In the U.S., the 525 basis point increase in the Fed Funds rate over the last 19 months has resulted in a 30-year mortgage rate rising to a 23-year high of 7.31% according to LSEG Datastream.  The U.K. is not far behind, having raised rates

To date, 149 of the 199 companies in our Retail/Restaurant Index have reported their EPS results for Q2 2023, representing 75% of the index. Of those companies that have reported their quarterly results, 79% announced profits that beat analysts’ expectations, while 5% delivered on-target results and 16% reported earnings that fell below estimates. The Q2 2023 blended earnings growth estimate now stands at 18.8%. The blended revenue growth estimate for the 199 companies in this index is 3.2% for Q2 2023. Of those companies that have reported their quarterly results so far, 63% announced revenue that exceeded analysts’ expectations and

The first month of 2023 (and the last month of the retail industry’s Q4 2022) saw America’s largest party supply store file for Chapter 11 bankruptcy, a move that the StarMine credit models had predicted about a year ago. The rise in inflation has caused consumers to hold back on discretionary spending. The latest Refinitiv consumer confidence reading also indicates that consumers are concerned about their purchasing power, job security and future expectations. All of this is affecting consumers’ willingness to open up their wallets and hurting retail sales. According to the StarMine Combined Credit Risk (CCR) model, the most

While national soccer teams compete on the field for the ultimate prize – the World Cup — Adidas and Nike are doing battle in retail stores with tournament merchandise. The Adidas logo appears on the game balls and much of the equipment used in the competition. Such global exposure looks like it is benefiting Adidas, since earnings are expected to see a 61.4% jump this quarter. Adidas is the main sponsor of the championship, but Nike is also dominating the soccer play field … so who will have the highest score? Who dominates in the U.S.? Although this is a

Amazon’s Q3 2022 revenue increased 14.7% year over year to $127.1 billion, nearly in line with estimates of about $127.46 billion.  Meanwhile, operating income missed expectations and dropped 48% from a year ago. These misses come despite a strong Prime Day globally in July. Exhibit 1: Amazon Q3 2022 Earnings and Revenue Estimates vs. Results Source: Refinitiv I/B/E/S Amazon’s global exposure is also being hit by macroeconomic issues as rising inflation continues to diminish the consumer’s purchasing power. “Primarily in the consumer stores business, it was in international. North America, obviously, it was strong, but it started to slow a

U.S. Halloween retailing in 2020 and 2021 was spooked by the pandemic. Last year, supply issues left shoppers with empty shelves at big box stores such as Target, Home Depot and Walmart. This year, however, there’s been a 27% increase in the amount of Halloween home merchandise online, and a 61% increase in Halloween costumes and accessories, as Refinitiv discovered in a collaboration with StyleSage. Moreover, October to-date, 10% of the Halloween apparel online is completely sold out. Although Halloween merchandise has been selling out faster this year, luckily for procrastinators, there still seems to be more Halloween items available