Research

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

To read Trivariate’s recent research note on the key components to US corporate earnings click here.

Following our 2H 2023 outlook note published earlier this week, we received numerous questions about corporate earnings.  Our judgment is that the current valuation of the stock market is hard to justify vs. any longer-term perspective or vs. bond yields.  Positioning, sentiment, and “animal spirits” can only last for so long. For the market to continue

Today we are publishing our 2H 2023 US Equity Outlook and hosting a webcast at 11am EDT to discuss our work. Click here to register for the webcast. We will also have a replay available tomorrow morning. In the note we focus on earnings and margins, valuation, risks, capital use, available alpha, some frameworks for