Two factors to watch for in Q2 earnings
The S&P 500 (^GSPC) and the Nasdaq (^IXIC) are aiming for record highs ahead of the Fourth of July holiday. Horizon Investments head of portfolio strategy Zach Hill joins Market Domination to analyze the state of the market and how investors should think about their portfolios. "We do think that inflation is largely under control. And at the same time, the economy is showing that it's more resilient to higher interest rates," Hill explains. He highlights how critical second quarter earnings will be given the narrow performance of the S&P 500. "We're going to get top-line good earnings growth of about 9% year over year on a consensus basis. And so, broadly speaking, that's healthy for the overall market. It should be healthy, too, for not just the top of the market but the rest of the market," he states. Hill will specifically look at margins and continued AI enthusiasm during the upcoming earnings season. On the margins front, he explains that "companies that can maintain their margins and pricing power are going to be rewarded by the market, and companies that can't, what we'll see is underperformance." He adds that the stocks that have been driving the market are focused on AI, and the trend keeps contributing to earnings beats. For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Melanie Riehl
