This note aims to share our research team’s internal checkpoint process in evaluating the current state of the economy as it pertains to markets. The pages that follow will have familiar content for those who follow our work, but with the added benefit of connecting the dots across all the economic and financial data our systems use to make portfolio decisions.
This material is typically reserved for clients of Prometheus Institutional. We make these notes available to the broader public when we believe they offer value to a wide audience. Given the centrality of technology companies to equity indices, we think understanding their drivers, risks, and guideposts can benefit most investors.
Synthesis: Strong consumer spending and business investment continue to push the economy forward. These forces are also driving a strong profit impulse to the technology sector. While we find technology profit expectations to largely be justified, we see some potential for re-rating. Much of the risk of this re-rating can be mitigated through a careful watch of earnings momentum, which we demonstrate systematically.
Read all the data driving this assessment below:
Until next time.