Another Positive Week for Stocks as Goldilocks May Be Back

Jeff Buchbinder:

<Silence> Hello everybody, and welcome to the latest LPL Market Signals podcast. Jeff Buchbinder here, your host for this week with my friend and colleague, Adam Turnquist. How are you today, Adam?

Adam Turnquist:

Hey, not too bad, surviving after a long weekend here.

Jeff Buchbinder:

It's a little easier to survive when it's a green screen. Hopefully you know, those listening didn't party too hard on Cinco de Mayo. But yeah, we're recording this on Monday, May 6, where we have a really nice you know, a little rally here going and you know, hopefully it keeps going. We'll talk about why we're up, why we were up nicely on Friday. And up again today when we do our market recap then we're going to hit "Sell in May go away", which is certainly a topic many of you are hearing about in the media. It always gets a lot of attention, probably more than it deserves, based on what's been happening in recent years. But we'll go through that. The Weekly Market Commentary is on lpl.com, so Adam did a really nice job writing that, so I'm glad he's my guest this week. Next chart check as we do with Adam every time he's on. We also had to sneak him in here real quick because Adam, you're going to be busy the next few weeks with a new member of your family coming. So glad we were able to get you on today. Yeah, you're getting into crunch time.

Adam Turnquist:

Yeah, next time I'll have probably more gray hair or less hair when I'm back on. Baby number two's coming this week, one way or another. So we're getting very excited here, getting a little nervous, of course, but be a new addition to the family, and we're thrilled for it.

Jeff Buchbinder:

That's awesome. You certainly won't catch up to me on the hair loss track, but yeah, as someone who's raised two kids, yeah, there can be some challenging moments, I guess balance in everything. So we certainly hope all goes well best to the Turnquist family. So we'll wrap up with just a really quick update on earnings season, and then it'll probably be the quietest or quickest week ahead that we've ever done <laugh>, because there's practically nothing on the economic calendar. So again, it's May 6, 2024 as we're recording this. Starting with the first piece of the agenda, stocks rise on hopes that Goldilocks is back. So of course, Adam, we had the slowing job gains on Friday for April, 175,000 jobs created.

Jeff Buchbinder:

Expectations were 240. So that, of course is a soft Goldilocks type number. And then you had the wage numbers in that report also come in below expectations. So you know, this was enough of a Goldilocks kind of report that you know, we move past the higher for longer fears with the Federal Reserve. You know, remember we've, you know, priced out a lot of rate cuts. Now on Friday, they started to get added back in, and so what you saw was a nice rally Friday, stocks up 1%, and then you know, bonds up strongly as well. So, two week win streak after a three week losing streak. And so far this week's off to a good start. In terms in terms of sectors, Adam, I think utilities is where you have to start. I know you've got a chart on that, but what a run for utilities.

Adam Turnquist:

Yeah, it's been an impressive rally. Kind of a quiet run. Not a lot of commentary around utilities over the last, or at least first quarter. We're starting to play a little bit of catch up. We'll talk about why as we get into the presentation today, but kind of an exciting story beyond just the boring old utility sector that you may think of.

Jeff Buchbinder:

Yeah, that's right. You know, you would expect utilities to struggle when rates go up, but it was a leader as rates went up, which tells you there's something else going on. So that certainly stood out really above all sectors, not just the last week, but utilities are the best performer over the last three months as well, along with energy, which happened to be the biggest loser last week. So, you know, oil has come back a little bit as at least it looks like this latest round of Israel Iran conflict is contained, or at least, or is it for now? But we'll see what happens if Israel moves into to Rafah here. There's certainly a lot of talk about that, that could, that could cause oil to rally. It's going to continue to follow the headlines, but at least last week, the headlines were not as bad as feared.

Jeff Buchbinder:

That certainly has the ingredients of a growth led market. So we saw growth stocks outperform value stocks. I think on the international front, Adam, the I mean, we've, I guess we've gotten some cooling in the dollar lately. Part of that is because the yen has bounced, but Hong Kong has surged up 6.9% for the Hang Seng over the last five days. I guess the Chinese markets were closed and, you know, in part, at least over the last week. But it's been a really strong market over there, especially in tech.

Adam Turnquist:

It's been pretty consistent too, in terms of buying pressure. When you look at the Hang Seng going from bear market to bull market in pretty short order, flows have been moving into the Hang Seng in Hong Kong. Today, we're seeing mainland China play a little bit of catch up. They were closed on Friday due to a holiday. But yeah, I think there's many different variables going on. One of them is, they're relatively cheap compared to the S&P 500 as investors look globally for maybe some value in the market. Of course, sentiment very washed out, oversold as we started the year, and I think investors are starting to kick the tires in China a little bit more.

Jeff Buchbinder:

Yeah, it's, you know, when a market goes from cheap and essentially disliked by everyone, to a little bit less cheap and a little bit less bad <laugh>, right? You can actually you know, you can move a market pretty quickly. So that's what's happening there. It's really hard to love what's going on there, but given valuations and sentiment certainly it continues to look like a really nice trade. So, you know, we're neutral on developed international equities at LPL Research. And we're still underweight tactically emerging markets, but we do like China as a trade, as long as you're watching it closely and keep it on a short leash. Looks like a really, really good trade here. Actually you've got a chart of that, if I'm not mistaken, and that we'll get to in a minute.

Jeff Buchbinder:

So you know, why were stocks up nicely, you know, because Goldilocks returned it looks like. And you know, what does that mean? It means bonds surged, right? The Bloomberg Aggregate Bond Index up 1.2% last week that, you know, the bond market is still down about 2% year to date, but, you know, that's quite a bit of catch up. <Laugh> a lot of progress at recapturing those losses. So we still like bonds more than cash, rates might be topping here. It's a little uncomfortable to say that because, you know, frankly, we've thought that at times in the recent past. But it looks like, you know, 4.7 might hold at least for the time being as we potentially get closer to rate cuts. And that means you know, bonds are a pretty comfortable place to be. They can provide defense as well as income, so still comfortable with bonds, still suggesting fully invested in equities and in fixed income. So how about commodities? Adam, anything jump out at you here? I mean, I'm seeing that big gain in natural gas. I guess that's one thing.

Adam Turnquist:

Natural gas was a big story last, really the last couple weeks. We've had this major relief rally off oversold levels. Couple months ago, nat gas was retesting the pandemic-era lows right around 1.45, 1.50 could not get through that support level. So I think bears capitulated a little bit here, and now we're seeing a pretty big rally the other way, getting back above some key support at $2. Part of that has to do with expectations for summer heating demand. With El Nino, we had a warmer than anticipated winter that's supposed to be forecasted at least to carry into the summer, so it could be a hot summer. And then it also ties into some utilities as well with demand for nat gas powering some of the increased demand in the utility sector. The other one to watch is WTI crude oil. You can see there right around $78, had a rough week last week down 5% as some of that geopolitical risk premium evaporated from oil, but it is oversold, near the lower end of rising price channel. So we'll be watching to see if we get any type, any type of bounce there. You look at supply and demand dynamics, the futures curves still in backwardation. That's a good sign for a tight oil market that hasn't changed yet. So I think overall looks constructive longer term. Might get a little bit of a bounce here off these oversold levels this week.

Jeff Buchbinder:

Yeah, we still like the energy sector here. It's a little bit of a geopolitical hedge and you know, potentially could do well if the growth stocks don't, right? We still got a slight recommended tilt towards growth stocks and you know, love the earnings power over there, which I'll get to in a minute with the big techs. But, you know, maybe you could say we're barbelling it a little bit with the energy position. So still like that. I know it's been a choppy place to be here lately. But the fundamentals still look pretty good to us. And you know, we're in the seasonal favorable seasonal period for energy, so we'll keep watching that one. The dollar weakness is supported, particularly yen strength, has supported international equities a little bit.

Jeff Buchbinder:

So we've seen better performance out of the international markets here lately after they had, you know, a number of months of struggles. So if currency is no longer a headwind, then the international diversification should begin to work for you. So let's move on to the "Sell in May" discussion here, Adam. And you know, I titled this, you know, "Sell in May Maybe Losing its Luster" because you know, even though the numbers historically going way back are fairly compelling you know, if you look at more recent history, not so much. So why don't you walk through these charts from our Weekly Market Commentary this week.

Adam Turnquist:

Yeah. So for those not familiar with "Sell in May, Go Away", the popular Wall Street maxim. Basically, it's this assumption that you sell your equity positions in May come back to the market in November when seasonals return, and then you enjoy your summer, go golfing, hit the beach, all that fun stuff. But when you look at longer term, you can see kind of why there's a little bit of a reason to the rhyme on the May through October returns up 1.7% on average for the S&P, that goes all the way back to 1950. That's the worst six-month period for the S&P 500 across all the different months. However, you're still positive you're up 1.7% and you're also higher 65% of the time. So historically you might underperform other six month periods, but you're still getting an average positive return and you still tend to be higher during that period.

Adam Turnquist:

So not necessarily the greatest investment adage I would call it, considering the positive return dynamics, and then especially when you look at the last 10 years. So if you're only as good as your last few at bats, on the next slide, we highlight just how the "Sell in May" has really been more of a buy in May type of philosophy. And you can see going back to 2014, the average returns for the S&P 500, you're up about 4% with a median right around 3%. And then importantly as well, you're higher eight out of those 10 periods. So you're still some pretty good six month returns for the market over that the last 10 years. So we'll certainly see how this "Sell in May" period works. But historically, you're higher on average 65% of the time, I think for the long-term investor. And more recently those gains have looked a little bit better than that.

Jeff Buchbinder:

Yeah, maybe it's a hold in May and then buy in October <laugh>. Maybe that's what you're really looking at. Some of those October lows, I mean, you know, what they call it, the month where bear markets go to die. Some of those October lows have been compelling opportunities. Actually the last two years that's been the case, but go back further than that. October ahead of an election could be a really compelling low to take advantage of seasonally. But, as you say, Adam, I agree that this is just, this is not the type of market that we would sell even if perhaps the near-term upside is limited as we believe generally because stocks are a little bit on the expensive side and rates are high, which does curb stock valuations. So you also you know, pointed out that this volatility profile during "Sell in May" is maybe another reason to be perhaps a little bit or temper your expectations a little bit for markets. What's your message here, Adam?

Adam Turnquist:

Really, if you're going to hold equities through the summer and especially into the fall, the price of admission as we outlined in our Weekly Market Commentary is just higher volatility. So buckle up as we get into July, August and September, that's when the VIX tends to peak. If you look at the seasonal progression of the volatility index, for those for a quick reference, that's the 30-day implied volatility of the S&P 500, that tends to peak right around the end of September, early October. That's when you get those October lows being made oftentimes. So that's really the message here is just there's more volatility during these periods, but again, if you step back, the average return is still positive. So ride the volatility out, I guess, or buy the lows if you're lucky enough in October.

Jeff Buchbinder:

Yeah, that's right. Looking at this I'd say this is an opportunity to potentially add, and, you know, if you've maybe got a little more risk than you want, sure, May could be an opportunity to take a little bit off the table and position yourself for really tactical investors, to add more risk later maybe as we get closer to the rate cuts actually happening and closer to election day. So this a little bit different concept, but it kind of relates to "Sell in May" because there's a really good chance that the Fed is going to cut rates or start cutting rates during this "Sell in May" period, Adam. So you know, thanks to Strategas for, you know, the help putting this together, it's a really interesting study. The point here is that if the Fed pauses for a long time, and I think this one's going to qualify, then that is generally good for stocks.

Jeff Buchbinder:

So on the horizontal axis, we've got the number of days of a Fed pause, so it's the time between the last hike and the first cut. So we had a hike back in July of last year. We have possibly a cut late summer, early fall this year. So maybe that'll be like a, I don't know, let's call it a 12 to 14 month pause, that's on the longer side. In fact, the only longer pause in this study, at least over the last 40 years or so, has been 2006. So even though the average S&P 500 performance during a pause is, you know, only about 13%, 12, 13%, if you just look at the long pauses, it's actually higher. So you see two nineteens here, you see a 22. So we're only up about, actually, from the time we priced this, stocks are up a little bit. So we're up, you know, 13 and change during this current pause, we think we have a little bit more upside, not a ton, but based on this study, you know, maybe we've got a few more points of upside in the near term. What do you think, Adam?

Adam Turnquist:

Yeah, I think it's important to factor in other variables beyond seasonality, of course. And when you think about earnings, economy and Fed policy is certainly drivers of price action, not just seasonality. And I think this sets up a pretty good historical precedent, especially you can see 1995 up there, that was a soft landing scenario with the S&P up 19% during that period. Of course, that was a little bit shorter, but I think the big question is about the rate cuts and when and why, why being the most important factor. Are they cutting because they have won the battle against inflation or because a recession is more imminent than expected? And I think for now, the market is really tied to the soft landing scenario, at least over the last week. Those narratives changed pretty quickly as we've witnessed, especially in April.

Jeff Buchbinder:

Yeah, absolutely. So you know, base case is a couple cuts, but certainly that could move either direction depending on the data. So let's move into your charts, Adam, you've got some really interesting ones. We've already teased a couple of them, I guess, with you know, utilities in China. So why don't you start with the S&P and then run with it.

Adam Turnquist:

Yeah, so the S&P 500, making some technical progress over the last two weeks as you highlighted, we've had two straight weeks of positive gains here, and we've had a decent little relief rally off those mid-April lows. Things got pretty oversold as over half the index hit new four-week lows, mid-April, we've bounced back and now we're actually intraday here above the 50-day moving average. That's going to be a key level to watch this week. Oftentimes you'll see these kind of relief rallies that come up, oversold levels die out right around that 50-day moving average. So the fact we're moving above it, I think that's a good sign. Keep an eye on that level, right around 5,131 this week. And what's been striking about this latest pullback is just breadth holding up very well. You can see on the bottom panel the percentage of stocks that are trading above their 200-day moving average.

Adam Turnquist:

Think of that as participation in the bull market. The more the better. And even with, you know, five to 6% draw down that we are in coming into the last couple weeks here, breadth held up very well, you still have about three quarters of the S&P above their 200-day moving average. And then when you break that down by sector, it's really the more cyclical or offensive sectors that are participating, more so than the defensive sectors. I think that's another good sign for at least potentially this pullback being over. Of course, we won't know until the technicals play out here, but we're not too far away from record high territory. Keep in mind, there's not a lot of resistance till we get closer to that March 28 high. In terms of downside support below the 50-day watch the April lows, that's going to be a key level for the S&P 500. I think if we start breaking below that, that would suggest downside risk probably to that 4,800 area of support that goes all the way back to those January 2022 highs.

Jeff Buchbinder:

It'd be nice to hold that support if we test it again, probably make people more comfortable going long. All right, so next yields, which of course are important for equities.

Adam Turnquist:

Yeah, they've been a big driver of the ups and downs of this bull market and can see yields backing off some key resistance right around, call it 4.70. Got a little bit overbought as we broke out through some key resistance levels. And the pullback has been pretty significant. As you mentioned, we are at right around a 4.70 on the 10-year, and now we're down to right around 4.50. Next support level you want to watch here is going to be 4 38. That coincides with the 50-day moving average. And of course those October 2022 highs. So there's a confluence of support yields are coming into. It'll be interesting to see if this recent downside momentum can break through that support and move yields lower. Of course, you have the 200-day moving average as well around 4.30. But for now, when you step back, I think you have to give the uptrend the benefit of the doubt.

Adam Turnquist:

Here you can see really since December, higher highs, higher lows, yields above a 200-day moving average. Surprises tend to happen to the upside when you're above a rising 200-day moving average. So we'll be monitoring this to see if it's just a pullback from overbought levels or if there's any trend change, but too early to call for a trend change now. One of the more interesting things to see play out here on this latest move higher is the correlation between yields and stocks. That's the bottom panel. And this rally that we witnessed in yields through this 4.35 level just over the last month, has not been impactful as it was last summer. If you flash back to that big rally we witnessed in July through August, September in Treasury yields, you can see the correlation breakdown during that era. And at this point, we're still negative, but not anywhere near levels in terms of the negative correlation. So I think maybe there's a little less sticker shock and when we witnessed the breakout here, and then of course maybe the economy's doing a little bit better and there's more investors a little more comfortable with the economy handling, call it a 4.50 10-year Treasury yield than last summer.

Jeff Buchbinder:

Yeah, if yields are moving higher because the economic growth outlook's improving, then stocks are going to have a better chance of digesting that. It's just when it, you know, when you start hearing that "S" word stagflation, that's, you know, what Powell really discounted in his comments last week. But when you start hearing that and you get a weaker growth outlook with stubborn inflation, stocks don't like that. So, you know, there's been a whiff of that. It certainly impacted stocks here over the last several weeks, but nice to see this break in yields and you know, subsequent bounce in stocks. All right, we teased it. Here's utilities regaining power. This has been one of the most surprising sector leaders I think I can remember seeing because it's so hard to explain when cyclicals are doing well alongside utilities as interest rates are rising <laugh> that is typically not an environment for utilities to do well. What's the chart telling you about whether this can continue, Adam?

Adam Turnquist:

It looks like it's going to continue here for the utility sector. It's made a lot of technical progress over the last few months. You can see reversing that downtrend climbing out from a bottom and now finally registering a higher high. So you have higher highs, higher lows. That's the definition of an uptrend, not to mention all of the bullish crossovers between the moving averages. So more validation of a new uptrend here for the utility sector. Of course, we look at things on a relative basis as well, and that's the middle panel. We compare the utility sector to the S&P 500 to define where the relative trend is. So you can see it's really been a consistent underperformer over the last year and a half, we'll call it. That trend is starting to change, and you can see an inflection point here as that ratio chart moves higher, utilities are starting to outperform, I think, to really make the call for leadership here, you want to see that ratio chart get through the 200-day moving average and above the 2023 lows, very close to that inflection point.

Adam Turnquist:

And then last but not least, is just momentum on the bottom panel. This is it's called a PPO indicator. It's just a relationship between two moving averages. That has been a buy position. So again, more confirmation of this rally continuing. And it's probably not all defensive. We had of course some defensive moves as the market pulled back, but as you mentioned, rates moving higher and utilities also moving higher. It's kind of a hard narrative to explain, but I think the big driver has been this growing traction in AI power consumption demand that's forecasted to really provide a huge tailwind for the utility sector. Think a lot of investors are paying attention to that trend and using utilities is more of an AI derivative versus going into some of the other direct AI type names. They're looking at areas like utilities and realizing that how much power these data centers are going to need over the next five, 10 years is certainly a big driver and a big tailwind for the sector. So it might not look like the utility sector that we used to know, I think as we move forward, in terms of some of these demand forecasts.

Jeff Buchbinder:

Yeah, it sounds a little bit like the, you know, the crypto mining wave, but that didn't really help utilities for very long, it seemed. So maybe, you know, this ones are obviously more power and more sustainable than just crypto mining. But really interesting. And I think the I think you're right on it, Adam, the AI piece of this, it just has to be the biggest piece. I mean, I've been following the sectors for, you know, pretty closely for 20 years, and I don't think I've ever seen anything this hard to explain by the sort of traditional characteristics of a rally that you might, that you might consider.

Adam Turnquist:

Yes, pretty interesting. Some of the, went kind of down a rabbit hole looking at power consumption. I found some interesting stats. Morningstar did some research and they noted in 2022, total global power consumption was right around 460 terawatt hours. They're expecting that to double by 2026. And if you want to know, how big is a terawatt hour or a thousand terawatt hours, that would be basically approximate to Japan's total electricity use just in data center over the next, you know two years. So there's some massive upgrades, of course, that's a global infrastructure play as well, but utilities should certainly have some tailwinds here in terms of demand, if this plays out as expected.

Jeff Buchbinder:

Yeah, Japan is not a third world country <laugh>. So to add that amount of power, that is that is a lot. So yeah, this will be fascinating to see how long the utilities rally goes. Maybe it is a little bit like the China situation where we would, you know, have a little bit of skepticism, but ride the wave <laugh>. That's how I might play this. Keep, keep it on a short leash just in case things turn. So that's an interesting one to look at. Let's keep rolling. The next one we have is tech. Obviously you can't talk charts without looking at tech

Adam Turnquist:

<Laugh>. Exactly, especially over the last couple months here. This is the S&P tech sector really kind of struggling over the last couple months. You can see this pullback, finding a little bit of support here off the February, January lows, bouncing again, back above the 50-day moving average. That's a good sign for the sector. But of course, we always look at things on a relative basis as well. And that bottom panel is the sector versus the S&P 500, and it has not made a new high, or at least a margin or even a meaningful new high since January. So you've had a period of lower highs here versus the S&P 500, suggesting I think tech leadership may be a little bit tired, taking a breather, hasn't quite rolled over yet. You can see how it bounced off that 200- day moving average, which is rising, but it's certainly being tested right now.

Adam Turnquist:

So this is going to be, I think, a key chart to watch this week to see if we get any type of tech bounce through this area of overhead resistance and get back to new highs with the tech sector. Relative performance not quite there yet, but I think it's going to be certainly an interesting chart, especially given the rotational dynamics of this market. We've had capital flowing into other sectors, I think coming out of tech looks a little bit expensive, of course, on the fundamental side and moving into other cheaper areas of the market maybe. Utilities, for example.

Jeff Buchbinder:

Yeah, we've been looking for some rotation. We've seen it, you know, some weeks not so much in others. But I guess being neutral tech is probably a sensible place to be given this has just gone back and forth and back and forth. You know, the earnings power is so strong that we've seen some really nice rallies. It's not just the tech sector, it's the big tech names that are outside of the tech sector, like Meta and Alphabet in the communication services area. But we've seen such strong earnings at a high level here. Not with all of them, but most of them, that it's really hard to bet against this group. So, you know, neutral with maybe a slight positive bias on tech and on large growth seems like a reasonable place to be. But we're certainly, you know, watching out for rotation, it looks like it might have some staying power.

Jeff Buchbinder:

All right, so moving right along, next China. Teased this a couple of times because this one's fascinating too. I don't think I've talked about 20 years of following sectors. I don't think in 20 years of being a global asset allocator that I've ever seen a major market hated so much <laugh>, right? To the point, well actually you probably don't count Russia as a major market in 2022. But this market has been so hated that there was really no one left to sell. That's how I would characterize it. So what, what do the charts tell you about China here, Adam? Is this, are we seeing any evidence that this run could keep going?

Adam Turnquist:

Yeah, and I think you nailed it. It was very hated. It was considered uninvestible at the start of the year. And now we're talking about China moving into a bull market. At least a lot of the major indices are now in bull market territory. Of course, the Hang Seng one of them, and it does come with credibility. All that bear sentiment. When you think back over the last year, they've have a major real estate crisis, youth unemployment at 20 plus percent, you had slowing growth, of course a lot of geopolitical risk and tariff risk all baked into that. But the market discounted that. And you can see how well they discounted that pushing the MSCI China Index down to its 2022 lows. Other indices were actually at their pandemic era lows. That's how low or how much discounting there was. And the PBOC or People's Bank of China started to react.

Adam Turnquist:

It does suggest that that old Wall Street saying that the stock market stops panicking when policy makers start to panic. I think what they're doing is a bit of a panic as they introduce new fiscal and monetary policy support to help the market. That's certainly helped drive this rebound. And you can see technically we're breaking out of what we call a head and shoulders bottom formation, just clearing the neck line. That's a key factor in terms of validating a breakout here. But it does suggest we have further upside to go here for the MSCI China Index, potentially to those late 2022, call it 2023 highs, close to $80. You can see how broad this rally has been. In the middle panel, the percentage of stocks above their 200-day moving average now at 62%. Momentum confirming the breakout as well with the PPO indicator just flipping into a buy signal.

Adam Turnquist:

So it looks like this call it a trade has more room to run. Relative performance is picking up as well. Wouldn't quite call it a sustainable secular leader when you compare it to U.S. markets, which I think is an important note <laugh>, because it has been a perennial underperformer, Jeff, as you know, over the years. But for a trade we like it, think there's some more upside to go. You can see that in fund flow activity as well. We've had three straight months of inflows into mainland Chinese equities, that follows six straight months of outflows. So there's a bit of a capitulation here supported not only on the technicals, but I think the fundamentals as well.

Jeff Buchbinder:

Yeah, if you have kids that are in a stock market game at school, maybe look for some volatile stocks in China because, you know, there could be some big moves in the short term there when you've got something that's hated positioning is extremely bearish. And frankly, the market's cheap. So really really interesting market to look at now. Let me do a really quick earnings update and then we'll preview the week, which will literally take us like 20 seconds. So earnings season, the numbers have gotten even better over the last week. We're now tracking north of 5% year over year for S&P 500 earnings for the quarter. But if you take out these big losses related to healthcare acquisitions you're actually up over seven. So what's interesting about that seven number is that's the amount of contribution we've gotten from the five big techs that well four have reported.

Jeff Buchbinder:

Five, if you count NVIDIA. NVIDIA reports in a couple of weeks. If you take the estimate for NVIDIA, and then the contribution to S&P 500 earnings from those other four big techs that are growing earnings, that alone is seven points. So what that means, it's a long-winded way of saying all of the S&P 500 earnings growth this quarter has come from five companies from those big techs. And it might even be higher than that because we'll see what NVIDIA reports. So this is bottom line. It's been a really good earnings season. Estimates for the S&P 500 earnings have actually increased modestly, which is unusual. So that's a win. And then you've got these big techs doing really well as a group. And you know, this has clearly supported the equity markets and helped with this recent bounce.

Jeff Buchbinder:

The pace slows down quite a bit though. We get 50-60 companies this week in the S&P and then it's going to really slow down to a trickle. So, you know, there's nothing really left to move the needle too much other than NVIDIA, maybe Disney this week. And that's about it. It's going to be secondary names. So good earnings season, little more left, definitely providing support for stocks. And then Adam, if we turn to the week ahead, there's pretty much nothing here. You know, I guess the senior loan officer survey on bank lending practices has some fans. And then the University of Michigan inflation survey is interesting. It's ticked up a little bit. Hopefully that'll tick back down. Frankly, I don't really see anything market moving here. What do you think?

Adam Turnquist:

I think the market needs this after the last couple weeks, we've been busy with the economic calendar, central banks, earnings, of course. So it's a much-needed light calendar, I think economically. I'm sure Jeffrey Roach would agree.

Jeff Buchbinder:

<Laugh>, yes, our chief economist probably likes the break after everything that's happened over the last couple of weeks. We do get a bunch of Fed speakers, so there'll be entertainment for all the bond geeks out there in that regard. That could swing yields around depending, but hopefully the commentary we get kind of syncs up with market expectations. So other than the earnings and the Fed speakers, frankly, the data's probably not going to move markets. We'll just watch geopolitics. That of course, always has the potential to move markets. But the quiet economic calendar is no doubt welcomed. So we'll go and wrap there. Thanks everybody as always for listening to LPL Market Signals. Thank you, Adam, for joining me this week before you take a little time off. Much, much deserved good luck to the Turnquist family. Thank you. And also actually congratulations to my daughter Emily, who qualified for the regional gymnastics championships over the weekend, which is very exciting. Not as exciting as adding a member of the family <laugh>, but still exciting.

Jeff Buchbinder:

Still exciting nonetheless. So nice work. So everybody, have a wonderful week. Take care and we'll see you next time.