Research

Earnings expectations are typically too optimistic for outyears and decline steadily. In June of 2022, the consensus bottom-up expectations for 2023 S&P500 were $252 in earnings. That sharply declined through the last three quarters of 2022 and steadily declined earlier this year to the current outlook of $219 (see below). That magnitude of decline is

In case you missed it, below is a digest of the most clicked on notes and videos that we published this month.  If you have any questions on these or other topics related to the current environment for investors, please let us know. Level Set – Bear Case, Bull Case, Broadening Case, and Capx /

To read Trivariate’s recent Level Set on the bear case, bull case, broadening case and Capx click here.

The market leads GDP. The recent bullish price action indicates at least one of two things is likely to transpire. Either earnings will be surprisingly good two-to-four quarters from now or we are nearing the beginning of a multiyear earnings cycle akin to the one we saw after the European financial crisis of 2011 that

While fundamentals have exceeded bearish expectations so far this year, it is challenging to justify upside to $5000 on the S&P500 given current macro conditions.  Assuming the consensus bottom-up EPS estimates are accurate, investors would need to pay over 20x earnings at the end of this year on 2024 estimates to justify 10% upside from

One of the main topics that surfaced during our client meetings this past week is the sustained rally in heavily shorted stocks. Twenty-two percent of stocks with more than 20% short interest today are up at least 50% over the last three months. Interestingly, a rally of this magnitude for heavily shorted stocks is not

To read Trivariate’s recent note on the dividends click here.

Over the long-term, dividends represent 35% of all equity returns but in the last decade have only averaged 16%.  Low 10-year government bond yields are potentially the reason.  We suspect dividends could matter more for equity returns in the next decade than the last, more in line with longer-term averages.   Strong performance in June might

To read Trivariate’s recent Level Set on the sources of multiple expansion click here.

Investors who have been too bearish are struggling with the market valuation and asking what they need to believe to get bullish now after such a big rally. There are a number of potential explanations for the market rally. The first reason is the lack of a bear case to earnings. While it is obviously