Editor's Note: Below is a brief note from Hedgeye CEO Keith McCullough sent to subscribers earlier this morning.
After a tidy two-day correction for the US stock market into last week’s end, it's straight back up to all-time highs. The Nasdaq ramped to another all-time closing high of 6149 yesterday as Earnings Season is ending with a bang:
- Nasdaq: 92 of 102 names have reported their respective quarters
- Sales: Aggregate year-over-year SALES growth has accelerated to +14.1%
- EPS: Aggregate year-over-year EPS growth has accelerated to +17.3%
Long SALES and EPS GROWTH continues to shine as a Style Factor, as it should when the U.S. economy is in Quad1 (i.e. when U.S. economic growth is accelerating and inflation is slowing in our Growth, Inflation, Policy model). Here's performance over the past six months broken down across style factors for companies within the S&P 500:
- Top 25% Sales Growth is +11.7% versus the Bottom 25% Sales Growth +1.4%
- Top 25% EPS Growth is +11.7% versus the Bottom 25% EPS Growth +3.9%
Bottom Line: If you got the sales and earnings growth accelerating calls right, you’ve got the +18.72% 6-month return in the Nasdaq right.