Hype-free market and investment perspectives from the Carson Group's investment research team.
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Careful what you wish for with breadth. @RyanDetrick and @sonusvarghese on Facts vs Feelings Ep. 211
📉 Breadth led by defensives
💸 The AI financing wave
📄 Inside Anthropic's S-1
🗳️ Brazil vs. prediction markets
🏦 Hawkish Fed risk
Full episode 👇
youtube.com/watch?v=TprZyxkE…
About a quarter of the S&P 500 has reported Q3. Blended earnings growth is 29.5%, and 83% of companies are beating estimates, by less than usual.
Meta was the first big AI spender to report, and the story was in its cash flow statement. This week’s Earnings Check-In🔥😎
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Tech, mostly chip sellers, trades at 19.6 times next year’s earnings, well below its 5-year average of 25.5 and below Consumer Staples at 23.3.
Analysts expect Tech earnings to grow 42% next year. Investors may be doubting the buyers or pricing in peak chip profits.
Three more of the biggest AI spenders report this week. Carson is watching whether revenue growth beats expectations while capex holds steady, and we also add free cash flow to the test.
We’ll find out whether they can still pay for it themselves.
carsongroup.com/insights/blo…
Meta’s capex grew 80% last quarter while operating cash flow grew 9%, and free cash flow went negative.
Carson's Earnings Check-In on why the AI spending bill shows up in cash, and what to watch as more big spenders report.
carsongroup.com/insights/blo…
Kevin Warsh has been at the Fed for three meetings, and stocks haven’t liked any of them. The S&P 500 fell 1.21% in June, 1.52% in July, and 0.45% in September.
Meeting four wraps tomorrow, Oct. 28. Ryan Detrick on why that date matters
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Cash is pouring into money market funds and cash-like ETFs. Some of that is investors finally earning something on cash and moving away from bonds.
Ryan notes past surges have marked good times to expect a rally in stocks.
Chart: @MacroCharts, not affiliated with CWM, LLC
Ryan expects stocks to move higher into year-end, with a seasonally strong November and December ahead and signs of extreme pessimism.
As we’ve said for a while, it’s all about tech right now. Strong hyperscaler earnings could spark the rally.
carsongroup.com/insights/blo…
Tomorrow’s Fed decision lands on what has historically been the S&P 500’s best day of the year. It’s also @RyanDetrick's birthday.
Ryan on seasonality, extreme fear, and what could spark a year-end rally.
carsongroup.com/insights/blo…
Blake splits AI capex into spenders of capital, the cloud giants, and receivers of capital, the chipmakers they buy from.
Over the last 13 weeks, spenders are up 9.8% and receivers 1.4%. That 8.4-point gap is near the 10.9-point peak spenders hit a few weeks ago.
Heading into Big Tech earnings, the cloud giants' AI spending has outpaced the chipmakers selling to them.
Blake Anderson on what that could signal and the revenue-vs.-capex test he’s watching this week.
carsongroup.com/insights/blo…
