S&P 500 Earnings Strength Masks Consumer Weakness as Cryptocurrency Markets Watch Macro Trends

Corporate America continues to deliver stronger-than-expected earnings, with 83% of S&P 500 companies reporting positive EPS surprises and 79% beating revenue estimates. Beneath the surface, RBC Capital Markets detects troubling signs of consumer strain that could Ripple across risk assets, including cryptocurrencies.

"The consumer-related companies that reported last week continued to describe a price-sensitive and value-conscious consumer," said Lori Calvasina, RBC's U.S. head of equity strategy research. The University of Michigan's consumer sentiment index fell to 53.6 in October - the lowest reading since May - while inflation expectations remain stubbornly high at 4.6%.

This economic dichotomy creates a complex backdrop for digital assets. While robust corporate earnings traditionally support risk appetite, weakening consumer spending could prompt Federal Reserve policy adjustments that often catalyze crypto market movements. The interplay between these forces may determine whether Bitcoin and altcoins continue their 2023 recovery or face renewed pressure.