Markets were sharply lower to kick off the week yesterday with the S&P 500 finishing -2.4% (its 3rd decline in last 4 sessions, NDX down 4/4). Breadth was widely negative with 463 names in the S&P finishing lower (~93% downside day) and Big Tech leading to the downside once again.
Looking at the big picture, we have bounced +9% off April 7th lows following the 90-day tariff pause announcement.
But now, reality has set in.
And the reality is, as of this moment, we are trading at ~21x forward P/E with deteriorating fundamentals and stagnating earnings growth.
Yesterday, Morgan Stanley said President Trump’s trade war has created “COVID-level uncertainty” for investors and corporations.
The data proves this to be true. So far through Q1 earnings, we have the fewest companies issuing guidance since COVID (13% vs 40% avg). Only 8/59 SPX companies to report have issued any guidance at all, and none have guided above consensus.