Strong first-quarter earnings have revitalized the market's hopes for an earnings recovery in 2023.The bank shared 20 defensive stocks with stable earnings to buy as markets grow more volatile.have given investors a renewed sense of hope. Perhaps the metric that demonstrates this best is earnings revisions breadth, or the ratio of companies revising future guidance higher compared to those lowering guidance.
Wilson pointed to a correlation between a change in price and revisions breadth as one catalyst for this change in consensus. "The driving force behind the resiliency in earnings revisions breadth is the expectation that the meaningful upward inflection in 2H '23 EPS growth will come to fruition, and that EPS growth will continue to improve in 1H '24 on top of that," Wilson wrote.may be misguided.
He is also worried that equities are setting themselves up for disappointment on the political side of markets, pricing in a bullish pivot in policy from the Federal Reserve.