The Recession We Almost Missed: Why Cap-Weighted EPS Hid the Slowdown

The economy did have a recession, but it moved through manufacturing, freight, and goods rather than arriving as one obvious shock.

Manufacturing spent 26 straight months in ISM contraction below 50, the longest stretch on record. Yet cap-weighted earnings hid much of the damage because the largest companies continued to report strong results. That made the slowdown easy to miss in the headline indexes.

Now the rebound is showing up in estimates. S&P 500 earnings are expected to rise 24% this year, a level of growth rarely seen outside post-recessionary rebounds. For investors, the question is whether that boom is broadening beyond big tech or simply reflecting the power of a few enormous companies.

Source: https://x.com/RosannaInvests/status/2061601522216227059