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earnings

Valuation Fallacies

By |2016-07-18T17:00:53-04:00July 18th, 2016|Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Everyone knows about lies, damned lies, and statistics. The quote has been attached to Mark Twain who apparently attributed to British Prime Minister Benjamin Disraeli. It remains among popular clichés because there is universal truth to it, a sort of caveat emptor lying in the background whenever one consumes an argument. Nowhere is that more the truth than economics and [...]

The Hope Trade Returns Though Severely Stunted As It Should Be

By |2016-07-12T18:50:49-04:00July 12th, 2016|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

All it takes are the words “record high” and all economic or financial sins are forgiven and forgotten. The financial media cannot contain themselves whenever they get the chance to use the term, adding qualifications like “soar” and “sharply” to make sure everyone gets the message. Context need not apply because stocks are supposed to be forward-looking discounting mechanisms. However, [...]

Waiting For Earnings To Correct? Q1 And Forward EPS Update

By |2016-06-22T12:50:43-04:00June 22nd, 2016|Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

EPS estimates are always in the practice of falling over time, so that natural process should be considered when comparing across the movement of the calendar. That said, however, earnings continue to defy projections of a rebound. This is not to say that analysts aren’t expecting one, only that the expectation keeps pushing further out in time. According to Howard [...]

Yes, Trauma

By |2016-04-25T18:43:43-04:00April 25th, 2016|Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Economists will not remove themselves from seeing the economy as it “should be” rather than take it for what it is (and what that actually means). They have latched their narrative to the idea that it is you who has the perception problem no matter how isolated the “recovery” becomes. There never was much indication for a decent recovery all [...]

There Is Significance In IBM’s Astonishing ‘Achievement’

By |2016-04-21T16:53:26-04:00April 21st, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

By now most people have given up on IBM. I don’t mean that they have dismissed the company as a dinosaur on its way to extinction but rather it has been pulled down from the Pantheon of bellwethers, no longer important in helping us determine the actual state of the US and global economy derived from actual results (rather than [...]

2015 Caused An Earnings Rift, Too

By |2016-04-19T12:32:02-04:00April 19th, 2016|Economy, Markets, Stocks|

As the major stock indices overtake or threaten psychological round numbers again (S&P 500 2,100; DJIA 18,000), they have done so with the same problem as occurred in 2015. Stocks have been overvalued for some time in historical comparison especially after QE3 and QE4, but it was supposed to be in anticipation of the full recovery that QE would make. [...]

Bubble Cycle Inefficiency And Valuations

By |2016-03-15T17:32:57-04:00March 15th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

Last week the Federal Reserve updated its quarterly Financial Accounts of the United States Z1 (formerly Flow of Funds) meaning that we can recheck valuation levels of the stock bubble from alternate points of view (data). The most common valuation given by the report is Tobin’s Q which compares the estimated value of corporate equities (liability) to nonfinancial corporate business [...]

Earnings Follow Recession, Stock Prices Still On Yellen’s Version

By |2016-03-08T16:35:20-05:00March 8th, 2016|Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Just a few weeks ago FactSet was reporting analysts’ estimates for Q1 2016 EPS were looking to be a 6.9% decline year-over-year. Their latest update now suggests -8.0%, as the deterioration in earnings outlook is becoming the most significant part of the trend. During the first two months of Q1 2016, analysts lowered earnings estimates for companies in the S&P [...]

7 Macro-Drivers for Capital Markets in 2016

By |2015-12-06T19:21:47-05:00December 6th, 2015|Commodities, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Global Growth Recession risks are low and growth should improve in 2016. Excess supply is especially apparent in the raw materials/commodities sectors. This state of overcapacity/supply and a strong dollar combined from 2014-2015 to create an environment of falling prices and sluggish growth in global manufacturing. The services sector continues to perform well. Continued expansion in the US coupled with a recovering [...]

Not A Done Deal

By |2015-11-08T18:29:21-05:00November 8th, 2015|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Last week's employment report raised the odds of a December rate hike considerably and the consensus at this point seems to be that it is a done deal. The employment report was pretty good with the unemployment rate down to 5%, 271,000 jobs added and a pay hike to boot. Year over year average hourly earnings are now up 2.4%, [...]

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