Very interesting stat from Ned Davis research showing the S&P 500’s annualized gain as a function of quarterly EPS growth.
Turns out, the best periods of stock performance ironically happen when EPS growth is between -10% and -25% as a YOY change. So with the world expecting 2023 to be a low growth or recession year, driving lower EPS growth, the bear cases which seem to be the consensus view currently, could be the best outcome for stocks!
That will make a bear choke on his dinner.
