Key Points:
- Three to four percent median sales growth expected for Q1 2025 across S&P 500/400/600 groups. Large-caps expect 4% EPS growth (MAG7 +10%), mid-caps +3%, but small-caps 0%.
- By sector, the best estimates are from Financial, Tech, Transports, and Utility. The worst are expected for Materials and Cyclicals.
- Estimates are falling into the quarter.
- -1% downward revision for large-caps over 60 days.
- -2% for mid-caps.
- -3% for small-caps.
- By sector, Financial, Tech, and Utility are the only three which haven’t seen median downward revision.
- However, full-year 2025 estimates are mostly holding steady. We suspect this will change given the latest round of tariffs.
- Looking at past periods when the S&P 500 has broken and stayed below the 200-DMA (for at least three days), the median time below is 19 days and the median percentage below is -4.6%. Today, it surpassed both of these, which is concerning (see Figure 6 in the attached PDF for all periods below the 200-DMA since 1990). Still, there are significantly more periods below the 200-DMA which did not turn into bear markets, versus those that did.
- Refreshing the FTD study from a few weeks back, if we do generate one next week, keys will be immediate progress and only moderate distribution. Should the first FTD below the 200-DMA fail, the second could be a very powerful one (1998, 2018), but if it fails, the likelihood of being in a bear market is very high.
