Posts filed under “Earnings”
So the non stop Fiscal Cliff paranoia continues unabated. Apparently, it is the ONLY THING that matters to the markets. Every twist and turn in the negotiations is crucial to the future of the Republic.
I don’t buy it. First off, as David Kotok explained, the fiscal cliff is more of a slippery slope than an actual abrupt cliff. And second, I detest single variable analysis when it comes to market action.
As we discussed last night, it behooves investors to consider what else is driving equity markets. I can think of at least five factors:
1) Earnings are the weakest in 3 years
2) Portfolios have been poorly positioned for higher Capital Gains and Dividend taxes
3) Europe crisis unresolved, and getting worse
4) The 17% rally in first 3 quarters had markets ahead of themselves
5) The decreasing impact of Federal Reserve QE.
The fiscal cliff amounts to about $600 billion in friction spread out over the course of 12 months. Fair estimates are that it will cost about 0.50% off of GDP, now estimated to be about 2.0% for the calendar year 2013.
I submit that these other factors weigh at least as much, if not more, in the markets current action.
Single vs. Multiple Variable Analysis in Market Forecasts (May 4th, 2005)
Fiscal Cliff or Slippery Slope? (November 19, 2012)
Source: Bianco Research With most of Q3 earnings now reported, we can take a quick look at the numbers, and they are none too pretty. Before you roll your focus to Q4 earnings, lets pull a few numbers from Nasdaq: -460 of S&P500 companies reporting, total earnings are down 2.2% (vs same Q3 2011);…Read More
click for larger table Source: Standard and Poors Standard & Poor (whom I frequently criticize as awful when it comes to ratings) does excellent work when it comes to assembling data on earnings for their flagship index, the S&P500. Their S&P 500 earnings and estimate report is quite excellent. You can download a spreadsheet…Read More
S&P 500 Index with Share Weighted Earnings Average YoY Gain/Loss From Fusion’s Kevin Lane: “The lower chart panel at bottom tracks the share weighted average earnings (gain or loss) for each quarter on a YoY basis for S&P 500 Index companies. For instance, @ present, with a bit more the 1⁄2 the companies reporting,…Read More
All this week, I have been discussing why I thought we may be coming to an end of the cyclical bull market that began in March 2009: Listen to Ritholtz Sees “Major Cyclical Correction” from Tuesday morning, and watch this and this from Thursday. I have cut back on some major holdings, and raised our cash…Read More
Sica Wealth Management President Jeff Sica, Beacon Economics Founding Principal Christopher Thornberg, and Bianco Research President Jim Bianco discuss the earnings season slaughter. They speak with Cory Johnson and Trish Regan on Bloomberg Television’s “Street Smart.”
The Earnings Minefield: How to Protect & Profit
Source: Bloomberg, Oct. 23 2012
Source: Bianco Research Don’t look now, but a hotly anticipated — and in some quarters, feared — earnings season is upon us. Of the first 25 “real” companies reporting, things have actually been pretty decent. The counter is that these are banks (JPM, WFC), who are much freer in the leeway in their returns,…Read More
Of all the people who have something to say about the BLS, none is more unintentionally ironic than former GE CEO Jack Welch. I have long stated that Jack welch was one of the luckier, more wildly over-compensated CEOs around. He became CEO of General Electric in 1981, just before an 18 year bull market…Read More