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Mounting risks

1Q24 Esrnings season is coming to an end, and as you can see in the chart below, it continues to be a concentrated market. 5 companies, are expected to have a combined growth in earnings of 64% vs same period last year, and the rest of the companies in the S&P500 will have a combined growth of -6%. These 5 stocks, with demanding valuations, are the ones pulling from the index up, as long as they can deliver earnings growth in line, or surpassing expectations. These group of winners used to be 7, the magnificent 7, and now it’s 5. Concentration risk in the market keeps increasing, paired with stubborn inflation and high debt. Finally, these companies, among others, have announced stock buybacks that will reduce the number of available stock even further, creating a supply shortage of paper, when demand continues to be high.


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