Skip to Main

04/15/2024 Market Strategy

  • John Stoltzfus
  • April 15, 2024

Keep On, Keepin’ On

Earnings season, economic data and a crisis in the Middle East greet investors this week

Key Takeaways

  • In our view it’s not about “higher for longer” when it comes to the Fed’s rate regime rather, it’s a continuation of the “pause for now” until inflation gives up its stickiness.
  • With only 29 or 6% of the firms in the S&P 500 index having reported it’s too early to say much about results. That said, 86% of firms that have reported so far have beaten expectations and a few cyclical sectors are showing double digit earnings growth for the handful of companies that have reported.
  • Last week’s inflation reports showed price pressures remaining sticky as the month-to-month increases surprised to the upside. This pushed out rate cut expectations and led to some selling in both the bond and stock markets. 
abstract financials

This week is likely to see the S&P 500 Q1 earnings season take center stage for investors’ focus with some 41 companies scheduled to report results across key sectors including financials, health care, information technology, consumer discretionary, consumer staples and industrials.

The mix of widely followed companies reporting this week includes an array of businesses including: banking, investment banking, insurance, pharmaceuticals, biotechnology, homebuilding, media (streaming), consumer goods purveyors and airlines that should provide a hefty brace of information and some guidance of management expectations of what lies ahead for investors to ponder as to the health of the economy, business and the consumer.

As of last Friday with only 29 or 6% of the firms in the S&P 500 index having reported Q1 results, it’s way too early to say much about what results will look like by the end of earnings season.

Quotation from Aenean Pretium

Often over the course of history inflation is late to be recognized by monetary officials and then difficult to put in check once it becomes embedded in the economy.

So Far So Good

Although it’s early in the season, still there are some interesting things to note. Four of the five sectors that have had companies report results thus far show double digit earnings growth. Those sectors are information technology, consumer discretionary, industrials and financials. The fifth sector, consumer staples, thus far shows earnings growth at single digits but just under 10%.

Last week’s economic data for March jostled both the bond and stock markets as inflation for a third month proved stickier than many investors and economists had expected dashing hopes for rate cuts sooner than later by the Federal Reserve and causing another round of asset class re-pricing for the near term with rate cut expectations tempered and pushed out further.

We persist with our view looking for the Fed to cut rates in the second half of the year and perhaps not until after the election to avoid the chance that any Fed rate cuts could be considered politicized or politically motivated.

For now, the Fed appears to us to have made remarkable progress in bringing down the rate of inflation that prompted the current rate hike cycle without to date causing a recession. Inflation tends to be sticky. Often over the course of history inflation is late to be recognized by monetary officials and then difficult to put in check once it becomes embedded in the economy.

That said, the actions of the Federal Reserve from the tenure of Paul Volcker through the leadership of Allen Greenspan, Ben Bernanke, Janet Yellen and Jerome Powell at the helm of the Fed reveal respective effectiveness in ultimately bringing inflation to levels that are manageable and to levels that actually have contributed to periods of sustainable economic expansion.

So far with 11 hikes and six skips (pauses) without a recession its progress not perfection with more work to be done.

In our view it’s not about “higher for longer” when it comes to the rate regime prescribed by the Fed this cycle but rather a continuation of the pause as it stands for now until inflation gives up its stickiness.

The current increase in geopolitical risk brought about by hostilities that have increased in the middle east over the weekend are likely to serve as a negative overhang for the market to consider until diplomacy can make progress to avoid further hostilities.

We remain positive on equities and continue to see fixed income securities as complimentary to stocks in providing portfolio diversification.

Some near-term profit-taking in the day-to-day action of the market, particularly in growth segments of the market that have had exceptional run-ups since last year into this year continues to appear to us quite normal. Such activity combined with a process of rebalancing and rotation into other segments of the stock market in our view can be healthy and contribute to the broadening of the markets’ progress from last year through this year.

Near-term volatility could in our view continue to present opportunity for investors to “catch babies that get thrown out with the bath water” in periods of market down drafts as the market digests levels of uncertainty that are not uncommon to times of transition like these and in periods of rising geopolitical risk.

John Stoltzfus headshot

John Stoltzfus


Chief Investment Strategist, Oppenheimer Asset Management Inc.

John is one of the most popular faces around Oppenheimer: our clients have come to rely on his market recaps for timely analysis and a confident viewpoint on the road forward. He frequently lends his expertise to CNBC, Bloomberg, Fox Business, and other notable networks.

Hide Bio


Strategist Certification - The author certifies that this investment strategy report accurately states his/her personal views about the subject securities, which are reflected in the substance of this investment report. The author certifies that no part of his/her compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this investment strategy report.

The strategy provided in this report is provided by Oppenheimer Asset Management Inc., (“OAM”) a registered investment adviser affiliate of Oppenheimer & Co. Inc. (“OPCO”). It reflects analysis of fundamental, macroeconomic and quantitative data to provide investment analysis with respect to U.S. securities markets. The overview in this report is provided for informational purposes and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security or investment advisory services. The report is not intended to provide personal investment advice. The investments discussed in this report may not be suitable for all investors. Investors should use the analysis provided by this report as one input into formulating an investment opinion and should consult with their Financial Advisor. Additional inputs should include, but are not limited to, the review of other strategy reports generated by OAM, its affiliates, and looking at alternate analyses. Securities and other financial instruments that may be discussed in this report or recommended or sold by OPCO or OAM are not insured by the Federal Deposit Insurance Corporation and are not deposits or obligations of any insured depository institution. Investments involve numerous risks including market risk, counterparty default risk and liquidity risk. Securities and other financial investments at times may be difficult to value or sell. The value of financial instruments may fluctuate, and investors may lose their entire principal investment.

Strategist Certification - The author certifies that this strategy report accurately states his/her personal views about the subject matter reflected in the substance of this report. The author certifies that no part of his/her compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this strategy report.

Potential Conflicts of Interest: Strategic analysts employed by OAM are compensated from revenues generated by the firm. The strategists authoring this piece also contribute to an OAM managed portfolio product that relies on and trades on the information contained herein. The managed portfolio strategy trades frequently, both ahead of and after the publication of this report. OAM generally prohibits any analyst and any member of his or her household from executing trades in the securities of a company that such analyst covers. Additionally, OAM generally prohibits any analyst from serving as an officer, director or advisory board member of a company that such analyst covers. In addition to 1% (or more) ownership positions in covered companies that are required to be specifically disclosed in this report, OPCO may have a long positon of less than 1% or a short position or deals as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon and makes a market in the securities discussed herein. Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.

Third Party Research Disclosure OAM has a research sharing agreement with OPCO pursuant to which OPCO provides OAM Strategy thought pieces to its institutional and retail customers. OPCO does not guarantee that the information in OAM Strategy reports is accurate, complete or timely, nor does OPCO make any warranties with regard to the strategy product or the results obtained from its use. OPCO has no control over or input with respect to opinions found in OAM strategy pieces. OAM is a registered investment adviser affiliate of OPCO.

This report is issued and approved by Oppenheimer & Co. Inc., a member of all Principal Exchanges, and SIPC. This report is distributed by Oppenheimer & Co. Inc., for informational purposes only, to its institutional and retail investor clients. This report does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited. The securities mentioned in this report may not be suitable for all types of investors. This report does not take into account the investment objectives, financial situation or specific needs of any particular client of Oppenheimer & Co. Inc. Recipients should consider this report as only a single factor in making an investment decision and should not rely solely on investment recommendations contained herein, if any, as a substitution for the exercise of independent judgment of the merits and risks of investments. The strategist writing this report is not a person or company with actual, implied or apparent authority to act on behalf of any issuer mentioned in the report. Before making an investment decision with respect to any security discussed in this report, the recipient should consider whether such investment is appropriate given the recipient's particular investment needs, objectives and financial circumstances. We recommend that investors independently evaluate particular investments and strategies, and encourage investors to seek the advice of a financial advisor. Oppenheimer & Co. Inc. will not treat non-client recipients as its clients solely by virtue of their receiving this report. Past performance is not a guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance of any security mentioned in this report. The price of the securities mentioned in this report and the income they produce may fluctuate and/or be adversely affected by exchange rates, and investors may realize losses on investments in such securities, including the loss of investment principal.

Oppenheimer & Co. Inc. accepts no liability for any loss arising from the use of information contained in this report. All information, opinions and statistical data contained in this report were obtained or derived from public sources believed to be reliable, but Oppenheimer & Co. Inc. does not represent that any such information, opinion or statistical data is accurate or complete and they should not be relied upon as such. All estimates and opinions expressed herein constitute judgments as of the date of this report and are subject to change without notice. Nothing in this report constitutes legal, accounting or tax advice. Since the levels and bases of taxation can change, any reference in this report to the impact of taxation. 

Investment Strategy should not be construed as offering tax advice on the tax consequences of investments. As with any investment having potential tax implications, clients should consult with their own independent tax adviser.

This report may provide addresses of, or contain hyperlinks to, Internet web sites. Oppenheimer & Co. Inc. has not reviewed the linked Internet web site of any third party and takes no responsibility for the contents thereof. Each such address or hyperlink is provided solely for the recipient's convenience and information, and the content of linked third party web sites is not in any way incorporated into this document. Recipients who choose to access such third-party web sites or follow such hyperlinks do so at their own risk. The S&P 500 Index is an unmanaged value-weighted index of 500 common stocks that is generally considered representative of the U.S. stock market. The S&P 500 index figures do not reflect any fees, expenses or taxes. This research is distributed in the UK and elsewhere throughout Europe, as third party research by Oppenheimer Europe Ltd, which is authorized and regulated by the Financial Conduct Authority (FCA). This research is for information purposes only and is not to be construed as a solicitation or an offer to purchase or sell investments or related financial instruments. This report is for distribution only to persons who are eligible counterparties or professional clients and is exempt from the general restrictions in section 21 of the Financial Services and Markets Act 2000 on the communication of invitations or inducements to engage in investment activity on the grounds that it is being distributed in the UK only to persons of a kind described in Article 19(5) (Investment Professionals) and 49(2) High Net Worth companies, unincorporated associations etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended). It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. In particular, this material is not for distribution to, and should not be relied upon by, retail clients, as defined under the rules of the FCA. Neither the FCA’s protection rules nor compensation scheme may be applied. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Oppenheimer & Co. Inc. Copyright © Oppenheimer & Co. Inc. 2024.