Editor's Note: Below is a brief excerpt from today's Early Look written by Macro analyst Ben Ryan. Click here to learn more about the Early Look.
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US GDP growth bottomed in Q2 of 2016 at +1.3% YY, and has accelerated for 8 consecutive quarters to +2.9% YY in Q2 of 2018. As you know, the probable scenario in Q3 is that this streak will be extended to 9 quarters. Sales and earnings growth for S&P 500 constituents tracks this sine curve nicely with the steepest growth rates solidified in Q2 of 2018 at +9.4% on the top-line and +25.3% on the bottom line. Operating margins have also expanded to a place where they typically face headwinds. And you know the story from here…. On most metrics there has been no forward multiple expansion since growth bottomed in Q2 of 2016 as equities have rallied. |
