JPMorgan Forecasts Weaker Corporate Profits and Stock Returns Due to High Rates and Slowing Growth
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JPMorgan expects corporate profits and stock market returns to weaken due to high interest rates and weak consumer finances.
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Consensus estimates of 12% S&P 500 earnings growth in 2024 are too optimistic according to JPMorgan.
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Higher interest rates will increase corporate debt expenses, reducing S&P 500 EPS by $3 according to JPMorgan.
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Slowing revenue growth, even a 1% decline, could reduce S&P 500 EPS by $2.25.
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Reduced corporate buybacks from high rates will also pressure EPS growth as it has been an important driver.