Last month, we commented that our earnings revisions work for the broad equity market had finally cooled somewhat. We also indicated that it was likely that it would not be long lasting or problematic. Well, the October review showed stabilization and minor improvement and suggests will continue through year end supporting our ongoing medium-term bullish view.

While many of the bearish forecasters view the ongoing rally is as unjustified and disconnected from reality, they are still only focused on the price moves of certain sectors and stocks. They continue to underappreciate the powerful combination of positive earnings revisions as measured by our proprietary Analyst Sentiment Measure (ASM) indicator, historically low interest rates, record monetary and fiscal stimulus, and the potential end of crippling lockdowns in the coming 3-6 months.

When looking at the broad-based S&P 1500 Index on cap size basis, Large Caps (S&P 500) revisions are still the best followed by Midcaps (S&P 400) and the weakest relative revisions are within the S&P 600 Small cap index. I continue to believe that this will stay in place until COVID-19 starts moving to the rearview mirror. When that does happen, I expect a major shift that will contribute to change in relative performa...

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