As we wrap up our coverage of Q4’24 earnings season, it’s clear that despite the spurts of market volatility induced by policy uncertainty, companies have continued to put together solid earnings results.
Heading into earnings season, our Q4’24 Inside The Buy-Side® Earnings Primer® survey, published January 9, registered a notable pickup in sentiment but with new and persistent challenges tempering outright bullishness, including policy uncertainty and tariff concerns.
Year to date, the S&P 500 has gained 4.0%, with most of the increase occurring in January. Since then, performance has remained relatively flat, with an uptick of less than 1% this month. Notably, only two of the ‘Magnificent 7’ companies — Meta and NVIDIA — have posted gains for the year, and the overall lackluster performance of this group, which accounts for roughly 30% of the benchmark, has weighed down the S&P 500.
Our analysis reveals the fundamentals of the Materials sector remain challenged albeit at uneven levels, characterized by general consumer caution, mixed volume trends, and anemic earnings growth. While certain pockets of strength exist — particularly in areas tied to technological and infrastructure-related advancements, as well as onshoring efforts in response to tariff concerns — a broad-based recovery remains elusive.
This earnings season, executives remain mixed and acknowledge a still challenging operating environment, citing continued limited visibility across most end markets. While certain pockets — such as data center infrastructure — continue to show strength, residential construction, auto, and consumer-facing markets remain sluggish – this echoes executive commentary from our Industrial and Consumer Sector Beats.
Dylan Yaworski has been a team member at Corbin Advisors
since 2015
Demand trends continue moving up and to the right across most end markets, while capex commitments remain stable to improving, even as the pace of AI advancement raises questions about long-term spending efficiency. Some industry leaders marveled at the speed of innovation, particularly with regard to the latest developments out of China, while others pounded the table over the need for U.S. exceptionalism to prevail.
This Week in Earnings – Q4’24 Technology in our Sector Beat The Tech sector is seeing broad momentum entering 2025, fueled by AI-driven demand, stable software spending, and expectations for a supportive U.S. policy environment. However, not all pockets of the industry are benefiting equally — while semiconductors, cloud, and enterprise software continue to see
Demand trends are mixed across the sector, with relative pockets of strength among travel/leisure, restaurant/QSRs, and lifestyle apparel names (with some noting good momentum into Q1 and a resilient consumer). On the other end of the spectrum, the group has seen its share of Q4 disappointments and lower-than-expected guides, with those tied to automotive/recreational vehicles and housing continuing to face a challenging demand backdrop amid still-elevated interest rates.
The Consumer Discretionary sector continues to face challenges, with macro commentary remaining conservative across the board. However, a sense of cautious optimism is building among executives who anticipate improvement over the course of the year — a theme we are hearing across sectors.
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