Key points from the report:
A better-than-expected earnings season and a slight increase to full-year 2019 EPS estimates have eased some growth concerns.
Median S&P 500 sales and EPS growth of 4% and 7% outpaced consensus by 0.3% and 4.2%, respectively. The EPS beat was the best in four quarters.
Over the past 30 days, median full-year EPS estimates have been revised slightly higher, the first bump in at least two quarters.
After a 5–6% pullback in the S&P 500 and Nasdaq indices, we moved the market to a Downtrend. It is possible the quick downside was just a brief shakeout, and we are encouraged by the indices’ quick retake of their 50-DMA. Still, we need to see a couple more days of healthy action to upgrade conditions.
Leadership has also acted very well despite the pullback. Trends of secular growth (payments, software) leaders remain largely intact, although most of these stocks are extended.
Focus List count ( 61 ) is healthy although down slightly from April highs.
Actionable ideas (buy): Advanced Micro Devices ( AMD ), Amazon ( AMZN ), Aon Plc ( AON ), Essent ( ESNT ), Union Pacific ( UNP ), Viavi ( VIAV ), Wright Medical ( WMGI ).
