New Observations from the broad-based S&P 1500 ERM review

My latest review shows that the healing process that began in earnest last month, continues to increase every week. I cannot overstate how BULLISH this is and would completely disagree with the bears, who claim ongoing rally is not justified. In comparable major earnings revisions bottoming periods, post-Tech Wreck in 3/03 and post Great Financial Crisis in 3/09, my work looked very similar and also supported these rallies that followed their respective major bear markets lows.

On market cap size, earnings revisions model (ERM) still remain best within Large Caps (S&P 500) and are followed then by Midcaps (S&P 400). The weakest relative revisions are within the S&P 600 Small Cap index.

  • There are two main areas of favorable readings: One is dominated by Secular Growth/FAANG and the other is the Value/Cyclicals (and as my colleague Tom Lee refers to as “Epicenter” stocks). Clearly, the number of favorable readings in traditional defensive areas of Staples, Utilities, legacy Telecom, and Real Estate are less represented.
  • I have high conviction that our proprietary methodology will continue to be extremely valuable for the remainder of the year by highlighting the best stocks to own.
How wil...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Want to receive Regular Market Updates to your Inbox?

I am your default error :)