A strong U.S. earnings season is reinforcing the case for continued gains in equities, even as investors prepare for potential volatility during February, a historically weaker month for stocks. Improving profit margins and broader sector participation are helping offset concerns tied to interest rates and recent market pullbacks.
BNN Bloomberg spoke with Ryan Detrick, chief market strategist at Carson Group, about earnings momentum, sector rotation beyond large-cap tech, metals volatility tied to Federal Reserve leadership uncertainty and what the January barometer could signal for the rest of the year.
Key Takeaways
- S&P 500 earnings growth has accelerated to nearly 12 per cent year over year, far above expectations from earlier in the reporting season.
- Record fourth-quarter profit margins are reinforcing the fundamental case for the ongoing bull market.
- Market leadership is broadening beyond large-cap tech, with industrials showing strong earnings growth and relative strength.
- Recent volatility in gold and silver reflects uncertainty over future Federal Reserve leadership and interest rate policy.
- A positive January historically signals stronger markets over the rest of the year, though February remains prone to short-term pullbacks.
Read the full transcript below:
ANDREW: We have a pile of U.S. earnings coming out this week, and our guest says we’ve been seeing pretty decent earnings so far. Ryan Detrick, chief market strategist at Carson Group. Ryan, great to see you. We’re only partway through the party, but you say the earnings reports have been pretty darn good, justifying the bull market. I know that index has been wobbly over the past couple of sessions.
RYAN: Well, that’s right. First of all, happy Monday, everyone, and thanks for having me back. You know, we are sort of early. I think maybe a third of the S&P 500 has reported earnings, and there have been some high-profile winners. You know, Meta did really well — Facebook, sorry, Meta. Meta is Facebook. Sorry. Meta did well. Microsoft maybe not as well, with their reaction.
But the whole aggregate, once again, is really strong. Look at almost 12 per cent year-over-year earnings growth right now, and it was expected to be like low fours this time about a month ago.
Now, one more thing: profit margins. Profit margins, according to FactSet data, in the fourth quarter are looking at an all-time record high going back to 2009. When you have higher earnings and you have higher profit margins, Andrew, that’s still a bull market, in our opinion. It justifies why we’re flirting with all-time highs at the time we’re doing this.
ANDREW: What has jumped out for you with these earnings reports so far? Ryan, of course, people are still obsessed with AI. Is any clear theme emerging there?
RYAN: Well, it’s been strong. I mean, you look at what the big tech names have said so far about AI — capex spending is not slowing down. That is something that is very true and real.
Now, the one thing, when you kind of peel back the onion, there are a lot more companies to report, but the industrials group earnings right now are up like 15 per cent year over year. It was expected to be virtually flat.
So industrials is that one group that’s really doing well. You and I have talked about this the last couple of months — it’s rotation from the Magnificent Seven to the 493. Industrials closed at a new monthly all-time high just last week.
The equal-weight S&P 500 last month, in January, was up three-and-a-half per cent. That’s a great move, versus the price-weighted S&P 500 up about one-and-a-half per cent. This rotation is real, and it’s being led by industrials, which to me is a good thing, because if the economy is strong, industrials lead, and that’s probably positive.
ANDREW: As opposed to just being fueled by tech, a few big tech stocks, right?
RYAN: Exactly. You know, you look at the breakdown of the S&P 500 gains the last several years. We know in 2023 and 2024, if you didn’t have a lot of tech exposure — specifically large-cap tech — you underperformed. You missed your benchmarks.
Last year was the first year again in about four years where the 493 actually added more to the overall gains. You look at where we are now, and that’s still happening.
I want to be very clear: this doesn’t mean we don’t like tech. We’re more equal-weight tech. I think a lot of these tech names are beaten up, maybe unjustified, and probably come back by the second half of this year.
But the reality is this is a global bull market. We’ve talked about that. There’s a lot of opportunity, and it’s being led by a lot of sectors, not just large-cap tech, which I like.
ANDREW: Talk to us about the selection of Kevin Warsh as the next Fed boss. The market apparently has some reservations that he may be more hawkish, more inclined to keep interest rates higher than President Trump even would like.
RYAN: Well, that’s right. You look at something like Fed funds futures — what the betting market said when this all came out. There’s not like more cuts coming. There are still two cuts coming, most people agree.
But if you look out further, even into 2027, he might not be quite as dovish as President Trump wants. No one knows. I get it — it’s early.
But I’ll just say this: he has a long history of being quite hawkish, being kind of anti-Fed in a way, bashing the Fed every year in Wall Street Journal op-ed articles. He became dovish in 2017, and he became dovish again recently. What was he trying to do both those times? Become the leader, chairman at the Fed.
So listen, we’ll see. But what really happened — as everyone knows — was the huge drop in metals across the board on Friday, with the realization that maybe he’s not going to be quite as dovish longer term as President Trump wants.
Once the dollar jumped on Friday — it’s been obviously very weak — but the reality is there were a lot of questions. It was kind of a sell-first, ask-questions-later mentality as it pertains to metals.
But let’s not forget, silver is up 65 per cent for the year. Gold was up 25 or 26 per cent for the year. So both of them had massive pullbacks — you could argue crashes, honestly — on Friday, and a lot of that was due to the uncertainty over whether he will be as dovish as President Trump wants. We are skeptical he will be, Andrew.
ANDREW: What about gold? Maybe we can put up a one-week chart. Do you think people were thinking, “Ah, there’s such momentum here, I’m just going to ride this pony”?
RYAN: Yes, we heard that a lot. Now, we’ve liked gold for a while. We added gold to our tactical models here at Carson Group back in March 2023.
Gold was up 25 per cent for the year literally on Thursday last week. That’s a stretched rubber band. Silver was a stretched rubber band. It could have been any particular reason to have the selloff.
What’s the old saying? The market takes an escalator up, but an elevator down. Clearly, that’s what happened in gold and silver and across the board — platinum, palladium, pick it. It was a rough, rough day.
But I will say this much: we’re still in the camp that this is more of a commodity supercycle that likely has years left to it. This would be the shortest gold bull market ever.
Copper just recently broke out to new highs. A lot of other industrial metals are breaking out to new highs. If the global economy is strong like we think it is, and we’re seeing that in earnings season, commodities and base metals will continue to do well. They just got ahead of themselves.
When you’re talking about silver up almost 66 per cent for the year by late January, that rubber band was too stretched and due for a violent pullback, and we’ve clearly seen that over the last several days.
ANDREW: Just finally, remind us how the January indicator works, Ryan. It often points to the performance for the year as a whole.
RYAN: Yeah, it’s a fun one. We call it the January barometer — so goes January, goes the year.
If January is higher, like it just was this year, the next 11 months are higher 87 per cent of the time, up about 12 per cent on average. If you’re down the first month, it’s more like a coin flip the rest of the year, and you’re up two or three per cent, not much.
This is just one data point. But from 2002 to 2022, a down January had a bear market. The last three years with up Januaries have been pretty good markets.
There’s a lot more to it, but I’d say the January barometer is one potential positive, a cherry on top, along with earnings and profit margins — which matter more — that says it’s still a bull market, in our view.
ANDREW: Ryan, we better jump. Thank you very much. Have a great February. Always great talking to you.
RYAN: Thank you. Appreciate it.
ANDREW: Ryan Detrick, chief market strategist at Carson Group.
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This BNN Bloomberg summary and transcript of the Feb. 2, 2026 interview with Ryan Detrick are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
