ISM services data came in stronger than expected yesterday — important because services make up roughly 80% of the US economy. The reading suggests we're tracking around 2% GDP growth, maybe slightly better.
This matters for corporate earnings. At 2% real growth, you get nominal revenue expansion in the 4-5% range (depending on inflation), which supports mid-single-digit earnings growth if margins hold.
Not spectacular, but enough to justify current multiples — as long as rates stay stable and nothing breaks. The economy isn't booming, but it's not rolling over either. Goldilocks for now.
This matters for corporate earnings. At 2% real growth, you get nominal revenue expansion in the 4-5% range (depending on inflation), which supports mid-single-digit earnings growth if margins hold.
Not spectacular, but enough to justify current multiples — as long as rates stay stable and nothing breaks. The economy isn't booming, but it's not rolling over either. Goldilocks for now.
