We view the Materials sector as a canary in the coal mine and will continue to monitor performance, as a rising tide for this sector tends to lift most ships as they are a leading economic indicator.
Despite near-term softness across some portions of the sector, most tech annual top- and bottom-line guides are setting the stage for growth in 2024, as nets have been cast on the comet known as AI, which blazes faster and brighter.
The better-than-expected U.S. GDP, consumer confidence, and spending in various areas certainly point to a more buoyant U.S. consumer, but on the flipside is the burden of record credit card debt and borrowings – the current concern about which can best to described as a bombastic shoulder shrug.
So far, Q4 prints are holding up generally well and it’s promising to hear industrial executives express cautious optimism about market stability and growth prospects.
Financials were dealt an interesting hand over the past year, which led to a lot of consternation among investors and corporate executives about the economy in 2023.
We hope you find our primary research timely, insightful, and actionable, beginning with today’s “Commencing the Quarter” and throughout the Q4’23 earnings season as we report on updates and emerging trends.
As 2024 comes in focus, we will see another batch of conservative annual outlooks, which will serve to calibrate expectations and further support the decoupling of the macro from the markets. Next year will be dynamics for many reasons, but mainly because we have a U.S. Presidential Election, which is sure to influence sentiment and spending behavior.
The markets welcomed a pause in interest rate hikes after the Fed’s Wednesday briefing, but the net effect of higher-for-longer rates on the consumer is anything but reason to celebrate.
We expect the next few quarters will be very telling, particularly as consumers drift through the holiday season and executives prepare to provide their 2024 outlooks. Indeed, with less than two months remaining in 2023, investor attention is increasingly focused on expectations for next year.
Earnings season is moving fast and furious with the latest batch of results and guides indicating more pronounced weakness than what the markets were expecting and certainly relative to the strong Q2 GDP print published this week.
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