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US equity futures point to a positive market open later this morning as stocks look to rebound from yesterday’s move lower. Despite that modest setback, with three days left in March, the major US market benchmarks are tracking for their fifth consecutive win. With modest pieces of economic data out today, quarterly results from just McCormick & Co.(MKC), and UPS’s (UPS) Investors Conference, but no talking Fed heads, today fits the “quiet week” profile ahead of US stock markets being closed this Friday. That lack of bad if not sobering news, likely means a continued melt-up in the market even as it once again flirts with being overbought. 

As we approach the Easter weekend and companies close their 1Q 2024 books, our eyes and ears will turn to March quarter earnings pre-announcements, good or bad, but we will also be watching for fresh signs for consumer spending, corporate cost-cutting, and AI-related investments.  What we and others will be looking to gauge is whether 1Q 2024 earnings growth will repeat their 4Q 2023 upside surprise.

As of now, data from FactSet puts 1Q 2024 EPS growth at 3.4% year over year, potentially the third straight quarter of EPS growth on that basis. Given the current P/E multiple of 21.4x consensus 2024 EPS for the S&P 500 that is already expected to rise more than 10% compared to 2023. With that multiple knocking on the door of recent highs established in the last few years, further upside for that market benchmark will be tied more to stronger-than-expected EPS growth than multiple expansions.  

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