An Advance Look At The Start Of Q2 Earnings Season And Weekly Chartology

Tyler Durden's picture

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Atomizer's picture

This might enlighten a few. As you know, the ESF is low on funds.


President Obama UN Millenium Development Goals Speech Full Text


MGD Support


ESF’s history - Part 5


Can you visualize where they're taking you?

Answer: The past, to try again. Simply retool an old model to fit today's social networking environment. It worked in the 80's, why not in 2012.. LOL

SmoothCoolSmoke's picture

My take is that the job sitch is going to flip the guidence switch to caution and that will take the steam out of positive EPS report.  Full disclosure:: I own AUG DIA puts.

Boston's picture


And it appears that the equity markets will need a little more time for the negative news from Friday to sink in.

By comparison, Treasuries seems to have reacted more substantially.

scratch_and_sniff's picture

I feel for the guy who has to trade through this madness, stocks are a full time game - just thinking about what a guy with an average size portfolio goes through this time of year makes me balk.

css1971's picture

We'll see what happens on the next treasury auctions. With the loss of the fed, it's likely/possible the yields will increase and the stock market will go with it. It's not so much that stocks are great, it's more that treasuries are not. Hey, maybe gold will jump instead.

Interestingly, gold has been leading both treasuries and the S&P. I have a sneaking suspicion it's taking on the role of safe haven from bonds.^TYX%2C^GSPC


Atomizer's picture


–noun, plural -ties.

  1. austere quality; severity of manner, life, etc.; sternness.
  2. Usually, austerities. ascetic practices: austerities of monastery life.
  3. strict economy.  

In a progressive world of thinking, rich countries must sacrifce to aid undeveloped nations. As you can see, the EU experiment didn't quite meet its expectations. We are off to the races in shoring up new revenue streams. Efforts are focused in helping ailing EU nations that adopted to the progressive idealogies.  


css1971's picture

Meh. TBond yields are still trending downwards... Stocks will follow.


AustrianEconomist's picture

Once all the easy money will wear off the economic growth will halt, corporate profits mean nothing anymore as indicator. It is clear that the Economic theories in place are outdated, just look at the unemployment report, 99.99% of professional economist were completely wrong and are all wearing their rose coloured glasses rather be realistic. The US economy is in huge trouble.

Check out the latest from the Capital Research Institute (CRI): Creative Destruction – A New Economic Order

css1971's picture

But it's not America any more, it's Chimerica. The money is printed in America, and the jobs growth happens in China.


disabledvet's picture

i frankly don't see how it's possible for the equity markets to have continued to rally after election day given the putrid state of the recovery unless earnings far from being a farce are instead a force.  so much so i hold to my belief these earnings and what's going on with equities overall in fact represent a "force of reckoning" where for some unknown and unknowable reason (i've been talking up cash all year) Corporate USA and shareholders simply aren't going to be denied.  Obviously tremendous rallies in treasuries can be seen in two lights:  a sign of impending doom or providing enormous liquidity for Corporate America to go in the immortal words of David Tepper "balls to wall."  With the Fed indeed not going to raise interest rates in Larry Kudlow's lifetime clearly "the coast is clear" since the goal from day one has been to move as much in the way of American risk capital towards risk assets and away from Treasuries the opposite of which is precisely what is happening in Europe.  If there is any doubt towards that which i speak on need only look at Japan's equity markets which in spite of the biggest industrial accident in human history has an equity market that is rallying.  Methinks they've studied in earnest "the Bernanke Way" and for maximum "balls to the wall" effect.


grid-b-gone's picture

Earnings will hold up, but as mentioned, recent layoffs will reveal that core sales growth and margin expansion (indicators of core strength in a recovery) are not present. The price of oil during Q2 will be a common reason for margin erosion and will play well in the market because the assumption will be that, going forward, this will not be as large a factor in Q3.

After considering layoffs as a reason for positive earnings, look at R&D and capital spending. Well-managed companies will be tapping these planned budget accounts to fill any mid-year earnings expectations shortfalls. Be wary of companies that eat their seed corn to please analysts.

Note the continued decline of commercial real estate in most areas. As with the banks, companies will not recognize declining value of their CRE and now have several years' worth of overstated plant values on their books.

Any company that uses several of these strategic accounting strategies and still struggles to meet earning expectations will likely have a tough second half.

After 13 weeks of 400k+ new weekly unemployment claims, coupled with the recent inventory build, consider that companies decided to stockpile finished goods and jettison the labor expense earlier. In some cases, there could be key components from Japan that will cause short-term layoffs, but order backlogs will indicate if layoffs and inventory increases are short-term or a red flag of revenue weakness.

Increasing bank layoffs are not connected to manufacturing stats like inventory. This indicates continued weak demand for mortgages, lower trading volumes at the retail brokerage level, stable (not growing) credit and debit card use, continued move to online transactions by customers (a productivity plus), and lower demand for retirement account services.

Expect solid earnings, though they may be slightly weaker than Q1. The devil, as usual, will be in the details.