Analysis:
As of July 18, 2024, only 70 companies had reported their Q2 ’24 earnings results, which is a small sample size to draw larger conclusions. However, next week, 134 companies will report their 2nd quarter earnings, representing 41% of the S&P 500. Corporate high-yield credit spreads tightened this week, indicating a healthy US economy. Investment-grade credit spreads are more sensitive to changes in Treasury prices. The S&P 500 data shows a decrease in the forward 4-quarter estimate for the second week in a row. The earnings yield and upside surprise for S&P 500 EPS have also seen changes. Looking ahead, it would be beneficial to see a pullback in the S&P 500 to reset the market bar. Mega-cap stock earnings release dates are also approaching, with 6 of the top 10 S&P 500 names reporting in the next two weeks. Investors are entering a challenging market return period, and it will be important to monitor how mega-caps trade after earnings reports. Overall, the data indicates a cautious but optimistic outlook on the US economy and stock market.