Hello, this is James Mayer, Branch Manager, from the Huffman Mayer Wealth Management Group of Wells Fargo Advisors. 

1.       According to FactSet, for the 2Q24, with 93% of S&P 500 companies reporting, the year-over-year earnings growth rate currently stands at 10.9%. If that is the final growth rate for the quarter, it will mark the highest rate of EPS expansion since 4Q21.

2.       The Chinese Manufacturing PMI reading for July was 49.4, the third consecutive month under 50. The PMI indices measure economic activity in a “diffusion index”, where anything over 50 shows expansion and any reading under 50 shows contraction. China’s Manufacturing PMI has been below 50 during 24 of the 54 months since the start of COVID-19. China is the World’s largest manufacturing economy, accounting for about 35% of global output. Source: Bureau of Statistics of China.

3.       According to FactSet, during 2Q24 earnings calls, 116 companies used the term “election” or “elections” when speaking with investors. The areas of policy most often discussed in conjunction with the upcoming election were: 1. Energy and carbon emissions (19 companies), 2. The Inflation Reduction Act (15 companies), and Tariffs and Trade policy (10 companies).

4.       According to the September issue of Harper’s Magazine, the percent by which known investment of Democrats in Congress and their spouses outperformed the S&P 500 in 2023 was 28%, while for Republicans it was 38%. There are numerous proposed bills to ban members of Congress and their dependents from owning and trading individual securities.

In Summary:

1.       2Q24 EPS growth is 10.9% with 93% of results in, the highest rate since 4Q21.

2.       China’s PMI remained in contraction during July, and has shrunk in 24 of 54 months since the COVID-19 pandemic began.

3.       There were 116 mentions of elections on 2Q earnings calls – most of often in conjunction with Energy and emissions policy, The Inflation Reduction Act, or Tariffs and trade policy.

4.       In 2023, known investments by Congressional Democrats and their spouses outperformed the S&P 500 by 28%, while Republicans outperformed by 38%.

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