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Andy Constan, founder and strategist at Damped Spring Macro, highlights the sharp rise in next twelve months (NTM) earnings growth expectations, which have climbed to 26.5% year over year.
Constan characterizes this increase as highly unusual except after a major earnings collapse, suggesting that if only half of the anticipated earnings growth is realized, stocks would remain stable.
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Constan has recently questioned Federal Reserve policymakers' logic after key officials stopped quantitative tightening and chose to maintain abundant reserves, as noted in a prior analysis. He has also discussed the potential for a June rate cut if Warsh is confirmed and Powell resigns, which could secure enough votes for the move, according to his recent comments. These views add further context to his outlook on earnings growth expectations.