Advisors.LeutholdGroup

In this session, Doug explores the unusual resilience of the stock market amid soft economic signals. He highlights how, historically, equities begin to falter well before a business cycle peak—but recent strength suggests investors may be looking past traditional warning signs.

The S&P 500’s estimated bottom-up operating EPS for Q1 lost altitude during the second month of reporting. (Chart 1). That resumes the rounded downslope of estimated EPS erosion for the quarter that seems foreign (though normal) after the resiliency of the 2024 data. The next three quarters of 2025—periods that will be affected by the trade war—continued their post tariff decline. The waning projections still have the index inline for 10% YOY EPS growth. At this point in the game, 5% growth is probably a stretch.