U.S. stocks have made modest early-stage gains so far this year, but have led to a range of title risks associated with AI investment papers, increasing inflation risks, tariff uncertainty and looming face-to-face on debt ceilings.
The S&P 500 rose about 3.4% over the year, with the Nasdaq trailing about a percentage point, partly because the lagging performance of Megacap Tech stock is partly related to concerns about their severe capital expenditure plans.
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But while U.S. stocks lag behind their European counterparts in the first six weeks of the year, given the myriad risks investors must endure, including President Donald Trump’s tariff policy and its ongoing issues on their impact on them, They performed stably. A wider economy.
Faced with this concern, what did the stock float after the emergence of China’s DeepSeek’s cut-to-price chatbot? In the coming year, corporate profit growth is much better.
“The Bulls and the Bears have a good debate on the market right now,” said Jeffrey Buchbinder, chief equity strategist at LPL Financial.
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Income key to bull market expansion
“On the one hand, economic growth, strong revenue and disinfection are likely to power stocks this year,” he noted. “But the inflation fight is not over; stocks are priced in a lot of good news and the policy landscape is fragile.”
“If the other leg of this bull market is higher, returns may be the main driving force,” he said.
In December quarterly earnings, about 80% of the S&P 500 report, collective profits will grow nearly 15% from the same period in 2023 to less than $545 billion.
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This is $20 billion higher than the market’s pre-season forecast and includes a “win” interest rate in title earnings, accounting for about 76.3% of the reported company.
In fact, the S&P 500 is now up over 2.2% thanks to the JPMorgan Chase ((JPM) On January 15, the informal fourth quarter reporting season began.
Stock markets need consistent profit growth
“Now, I know the media likes to talk about the pace and missteps of earnings, which is important, but for long-term investors, a better measure of your future success is revenue growth” Siebert Chief Investment Officer Mark Malek said.
“Technically, your stock cannot rise unless multiples expand or revenue grows; the former is safer than the latter, although multiple expansions can be made if supported by a strong paper.” As the growth rate is faster, faster speeds will be better, but the continued growth of EPS exceeds the peak of growth.”
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To this end, LSEG data showed that earnings grew by about 9.1% in the first quarter and collective profit of $514.2 billion, with double digits in each of the next four quarters after that. progress.
These figures indicate that the growth rate in 2025 is 11.8%, and will drop to profits in 2024 once the fourth quarter is in bed.
But Richard Saperstein, chief investment officer of the New York-based Treasury partner, believes that focusing on earnings growth has its own risks.
Revenue sets a height for stocks
“When stocks rely more on earnings growth without the help of multiple expansions, the standard level is even higher, and companies will face pressure from investors to deliver,” he said.
“We expect steady growth in earnings this year, but some expectations will increase and there will be some companies that will be able to achieve growth, but no expectations, which increases the risk of volatility,” he added.
However, Sapperstein noted that while valuations are still rising, he is bullish on stocks with the potential to “continued economic growth, regulate inflation and adaptive cuisine.” ”
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Jean Bolvin, head of the Blackrock Investment Institute, is based on what he calls solid macro prospects and a structural shift in “AI Mega Force,” but notes that the new environment expands the possibility The results of
“Although the escalation of trade tensions may remain stressed in the coming months,” he said. “We think they can continue to do so even with rolling tariff headlines – as long as growth is stable and inflation will be under control.”
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