• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Earnings - Hope Is Fading

Tyler Durden's picture




 

We have long commented on the hockey-stick-like expectations of a second-half 2013 resurgence in EPS and revenue growth. This miracle waiting to happen is, sadly, increasingly unlikely. As Goldman notes, the S&P 500 bottom-up consensus EPS estimate for the remainder of 2013 has fallen 1% since the start of earnings season. Revisions have been most negative in the Materials (-4.1%) and Information Technology (-3.7%) sectors. Managements are guiding well below consensus estimates. Of the companies have provided 2Q guidance, 76% guided with a midpoint below the mean consensus estimate (versus an average of 69% over the past 28 quarters). The median firm guided 4% below consensus (versus 3% historically). However, since the start of earnings season, bottom-up consensus full-year 2013 estimates are down only 40bp; suggesting analysts and serial extrapolators alike have considerable more reality to catch up to yet - but for now, hope is fading a little with EPS, Sales, and Margins expectations for the rest of the year all being marked down.

 

It seems the hockey stick is starting to droop...

 

most notably in Materials, Tech and Industrials...

 

Charts: Goldman Sachs

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Sat, 04/27/2013 - 19:11 | 3506457 q99x2
q99x2's picture

Who cares. It's not like they are going to cancel my FaceBook account.

Sat, 04/27/2013 - 19:17 | 3506466 Manipuflation
Manipuflation's picture

It's not like you could if you wanted to anyway.

Sat, 04/27/2013 - 19:22 | 3506471 flacon
flacon's picture

I think we are on the edge of a major market down-draft. I also think gold and silver (the paper kind) will go down with it like in 2008 - but this time the premiums will see exponential increases as the paper price goes down to its intrinsic value. 

 

 

Sat, 04/27/2013 - 19:53 | 3506521 sunny
sunny's picture

"I think we are on the edge of a major market down-draft."

Ahhh, let me see, this is either the 47th or 48th time I've read an opinion about the upcoming market "correction".  If you look at the charts, the grand all time high was about 160 points from where the Dow sits now.  This was suppose to be the mother of all ugly seasons for earnings reporting with 78% of companies in pre-reporting releases admitted that things were bad.  All indices are up 1%-2% from April 8 when earnings season started.  Life's a bitch.

I predict that the markets will crash, politicians will turn honest and the universe will end.  I'm just not sure when.

sunny

Sat, 04/27/2013 - 20:10 | 3506541 TheSilverJournal
TheSilverJournal's picture

I think we just saw the last deflation scare with this last PM sell off. Look how low bond yields became. It's up up and away from here as the market front runs the coming ramp in QE.

Sat, 04/27/2013 - 22:49 | 3506853 markmotive
markmotive's picture

It may be a farce, but at least we can eat and have a warm bed. I think we sometimes forget that we're quite well off compared to the rest of the world.

My hope won't fade until I'm swimming in a sewer for pennies like this guy:

http://www.planbeconomics.com/2013/04/the-worst-job-in-world-sewer-pipe....

Sat, 04/27/2013 - 23:21 | 3506883 knukles
knukles's picture

Eat drink and be merry 'cause it ain't gonna be getting any better, just worse. 
Even some of my more "Optimistic" buds are starting to figure somethings wrong... badly wrong.
But WTF....
Hockey stick global warming
Hockey stick earnings
Hockey stick GDP
Hockey stick employment
Hockey stick retail sales
Hockey stick investment
Hockey stick world peace
Hockey stick housing
Hockey stick oil production
Hockey stick political progress
Hockey stick Fed policy
Hockey stick Fiscal policy
Hockey stick lawful conduct
Hockey stick racial progress
Hockey stick personal income, nominal
Hockey stick personal income, real
Hockey stick no inflation
Hockey stick wheteverthefuckyouwant

Booyah

Oh don't worry honey, the starving urchins love to pick up the red hot pennies, they think it's fun, too!  May the Unicorns of Happiness Depoist Rainbow Colored Skittle Shit in All Your Meals

Sun, 04/28/2013 - 00:07 | 3506937 Western
Western's picture

Every time I see your avatar I think of Sloth from the goonies.

Sun, 04/28/2013 - 09:31 | 3507295 BandGap
BandGap's picture

Zippy the pinhead

Sun, 04/28/2013 - 07:07 | 3507147 Satan
Satan's picture

I have successfully predicted 11 of the last 3 crashes.

Sun, 04/28/2013 - 07:38 | 3507170 GetZeeGold
GetZeeGold's picture

 

 

Hell of a track record there.....no pun intended.

Sat, 04/27/2013 - 23:38 | 3506901 algol_dog
algol_dog's picture

God, don't ya all get sick of trying to call the top. These markets are never going down in any meaningful way for a decade to come.

"Learn it, know it, live it" ~ fast times at ridgemont high ~

Sat, 04/27/2013 - 19:46 | 3506504 kchrisc
kchrisc's picture

FaCIADossier--"You can cancel anytime but you can never leave."         hujel

Sun, 04/28/2013 - 07:24 | 3507154 geewhiz
geewhiz's picture

I don't know if we are allowed to keep our facebook accounts in the FEMA camp.

Sat, 04/27/2013 - 19:18 | 3506463 Dr Benway
Dr Benway's picture

My question is, how much of reported earnings were directly due to the share market rise, unrealized profits on companies' share portfolios?

 

In Australia, the financial sector is a third of the sharemarket's value, and the sector's earnings are directly driven by the perfomance of said market. Circular much?

 

Check out my presentation on crossholdings, inflated assets and other fraud:

http://s1144.photobucket.com/user/_DrBenway/library/The%20Great%20Australian%20Investment%20Ponzi?sort=6&page=1

 

Sat, 04/27/2013 - 20:02 | 3506529 Seize Mars
Seize Mars's picture

Ben-Way

Yah I remember reading your stuff, I think some time ago. Very well done. Keep up the good work.

Sat, 04/27/2013 - 21:21 | 3506672 Dr Benway
Dr Benway's picture

Thank you, Seize Mars, much appreciated!

If you would like to see the updates in chronological order, they are here: http://s1144.photobucket.com/user/_DrBenway/library/?sort=6&page=1

Sat, 04/27/2013 - 19:17 | 3506465 Atomizer
Atomizer's picture

Bernanke Exit Strategy

 

Some within the Fed, especially on the hawkish wing, worry the unprecedented bond buying will disrupt markets or feed asset bubbles, stoke future inflation, or lead to political interference if the central bank starts suffering losses on its balance sheet later this decade. The balance sheet could rise to $4 trillion by year end if QE3 continues apace. While the Fed is transferring large profits to the Treasury now, it may run into the red if it sells these assets when longer-term rates eventually rise. At the meeting, some officials worried about future asset sales. Several thought a decision not to sell mortgage-backed securities, or to sell them only very slowly, would mitigate financial stability risks and also "damp the decline in remittances to the Treasury at that time," the minutes said.

Sat, 04/27/2013 - 22:49 | 3506856 disabledvet
disabledvet's picture

well i guess they better keep QE'ing then...

Sat, 04/27/2013 - 19:25 | 3506480 Manipuflation
Manipuflation's picture

Hope?  I lost faith in that before ZH ever existed.  Hope of what exactly?  The truth, or finding out the enemy combatants?  They seem to be the same.

Sat, 04/27/2013 - 19:43 | 3506498 CrashisOptimistic
CrashisOptimistic's picture

It would be more meaningful economically (not trading wise) to have a look at earnings as dollars.  Not per share.  Total dollars.

There have been a great many stock buybacks done and it's corrupting and obfuscating the deflation in the general economy.

Sat, 04/27/2013 - 19:44 | 3506501 Kirk2NCC1701
Kirk2NCC1701's picture

I see two opposing camps/cruise-ships/themes in the MSM and sites like ZH:

 

1. Camp Fed et al (CNBC, MSM, etc) = We will maintain course until we have reached that distant shore that appears ever closer

2. Camp Contrarian (ZH, etc) = We will sink before we ever reach that shore

While the contrarians are keeping close to the lifeboats (bullion, real assets), the Fed party in the Wallstreet ballroom sure is mighty tempting to see and hear.  And maybe pop into for a quick dance, drink and banter. 

There's also a 3rd cruise-ship that's getting closer and has a golden shimmer:  The BRIC+ ship.

Time-sharing between ballroom & lifeboats, anyone?  Or shall be take a boat or chopper over to the BRIC+ ship?  ;-)

 

Sat, 04/27/2013 - 19:51 | 3506513 CrashisOptimistic
CrashisOptimistic's picture

You have it wrong. 

Camp 2, Contrarians, are "conservative economists".

Camp 3 is ZH.  There is no distant shore.  This shit is going to unravel while sailing to nowhere.

 

Sat, 04/27/2013 - 20:07 | 3506540 B2u
B2u's picture

No, the earth is flat with no end.  No need to worry about going over the edge because there is no edge.  I looked out my window and the earth looks flat to me. 

Sat, 04/27/2013 - 20:13 | 3506546 akak
akak's picture

Thomas Friedman, is that you?

Sat, 04/27/2013 - 20:18 | 3506556 Manipuflation
Manipuflation's picture

No, it was Jon Nadler in disguise. 

Sat, 04/27/2013 - 20:21 | 3506564 akak
akak's picture

Oh, you mean like with a pair, and being honest about gold?

Sat, 04/27/2013 - 20:49 | 3506622 Manipuflation
Manipuflation's picture

Remember all of you PM vets...  Ask yourselves if the kids are figuring it out.  If not, than why not?

Sat, 04/27/2013 - 22:53 | 3506861 disabledvet
disabledvet's picture

eh. "we've already destroyed everything" that's where i'm at. "unfortunately we've only made it to the third circle of hell and there are seven."

Sun, 04/28/2013 - 01:36 | 3507022 Manipuflation
Manipuflation's picture

I would not throw in the towel just yet on the dark avatars.

Sun, 04/28/2013 - 18:53 | 3508399 bluskyes
bluskyes's picture

Some older friends of mine were telling me about their 7-year-old grand-daughter. She had accumulated a bunch of change, and her grand-mother told her that she should roll it up, and take it into the bank. The girl flatly refused. When the grandmother asked "why not?" The grand-daughter said: "I don't trust banks"

I was quite impressed.

Sat, 04/27/2013 - 20:23 | 3506577 Apostate2
Apostate2's picture

No, the earth is curved so you can't see that far down the road.

Sat, 04/27/2013 - 22:22 | 3506807 A Lunatic
A Lunatic's picture

There is no Earth, only the matrix..........

Sat, 04/27/2013 - 22:52 | 3506858 Atomizer
Atomizer's picture

Nonsense, everything is a learning process. You will begin to see, in very near time.

Why am I here?

Sat, 04/27/2013 - 19:52 | 3506515 kchrisc
kchrisc's picture

BRIC?! Like throw a BRIC in the works?!

Or shit a BRIC?!

Is that a BRIC in your pants or are you happy to see me?!      hujel

Sat, 04/27/2013 - 20:08 | 3506538 Tulpa
Tulpa's picture

The BRIC countries have major problems of their own.  One thing I've noticed is that ZH's (justified) pessimism about EU/US/JP seems to draw a scatload of PRC/Russian propagandists in the comment sections.

Sat, 04/27/2013 - 20:12 | 3506550 Manipuflation
Manipuflation's picture

Captain Kirk.  I think most everyone here appreciates your fervor both young and old.  I have been on the BRIC ship and it is no better than what we have in the "West".  What is the "west" anymore anyway?

Some of us have been on a few more trips around the sun than you have been.  Why would you think that we can not see it too?  There is really no where to run.  We will have to turn around and face what it is we are up against.  They are stealing people's wealth via the "market", but it is too late.  

I only wonder if I have enough silver dimes, as do some others, to get a local economy going again based on trade of silver for goods.  Silver dimes in successful trade negates the need for me to use my guns in aggression.  Mr. Ludwig von Mises might agree.

Never go full retard.    

Sat, 04/27/2013 - 20:53 | 3506626 Kirk2NCC1701
Kirk2NCC1701's picture

Clearly John Grisham's job is safe, and my writing needs improvement, as my intent and cheeky irony went over the ship's sides.

I am in the camp that's by the lifeboats, but I'm "coveting" the ballroom party inside I'm missing out on, and thinking about popping in for a quicky of fiscal fun.

I'm also mindful of that BRIC ship (with its glitter and problems), and almost wrote "...shall we pull a Simon, and ferry/fly between the ships?". And yes, I realize how risky or costly a ship-to-ship transfer sounds in the context of my naval metaphor. Cheers.

Sat, 04/27/2013 - 21:26 | 3506673 Manipuflation
Manipuflation's picture

Plussed you for that one Kirk.  No one called you a fool that I can recall.  How are your children?  Bro, chill out a bit.  No one has really stood up against you yet from the old men forum.  That should be a clue.  Young man, you do know that some of us have been around for a long time on the interwebs?      

Sat, 04/27/2013 - 20:22 | 3506573 nmewn
nmewn's picture

"While the contrarians are keeping close to the lifeboats (bullion, real assets), the Fed party in the Wallstreet ballroom sure is mighty tempting to see and hear. And maybe pop into for a quick dance, drink and banter."

Good comment, a lot of elements to consider.

Yes, temptation is a large part of the game. So is risk management.

I can't say I'm immune to temptation & opportunity as it presents itself (moving in, collecting a scalp, then backing out) but the days of all-in, balls to the walls are long gone never to return...for me.

To your larger point, a lot of it also depends on the perception of standards, the fairness, the stability of sovereign(s) law, the likelihood (or lack thereof) of seizure/confiscation of "paper assets", even the domestic tax complications if everything goes according to plan. Its all part of the equation of risk management.

Then we move to the morality & ethics of investing in, say...a China or a Russia. Not to say the western world has made wonderful strides in addressing its decaying moral virtues & continuing ethical lapses but so far, the algo's rule supreme, if only making a buck was the intent ;-)

Sat, 04/27/2013 - 19:47 | 3506510 Colonel Klink
Colonel Klink's picture

Fuck you Goldman Ballsack!

Sat, 04/27/2013 - 19:58 | 3506522 JimBowie1958
JimBowie1958's picture

While the vast majority of us would probably live through an economic meltdown, it might prevent me from getting my high score in LOTRO.

/s

I only hope that the fucking assholes responsible for undermining our economy suffer as  much as the people they have sent to the poor house.

Sat, 04/27/2013 - 19:57 | 3506524 yogibear
yogibear's picture

A BRIC is about ready to be thrown at the Federal Reserve Open Market Committee. 

Sat, 04/27/2013 - 20:05 | 3506533 Tulpa
Tulpa's picture

Look for your profits, but do not trust to hope. It has forsaken these markets.

Sat, 04/27/2013 - 20:04 | 3506535 Seize Mars
Seize Mars's picture

I'm just waiting for the next Government attack against Americans.

Bombs? Bullets? Airplanes? Disease? Nukes? They're running out of ideas. The old plays aren't working.

They're in danger of becoming...boring

Sat, 04/27/2013 - 20:17 | 3506562 buzzsaw99
buzzsaw99's picture

earnings, lulz, like that has anything to do with anything. there is no market, there is only the bernank.

Sat, 04/27/2013 - 20:51 | 3506621 nmewn
nmewn's picture

Buzz speaks the truth. There is only the bernank.

I'm betting debt does in fact still matter or they can pull the plug on taxation without representation and all that entails.

Meaning, if the country as a whole, is appalled by the debts & deficits being rung up by their representatives on their children and they continue to do it and Benny continues to counterfiet the national currency to oblige them, there comes a breaking point away from all the above.

Sat, 04/27/2013 - 20:20 | 3506563 I am Jobe
I am Jobe's picture

More Fuckbook, Dell,HPQ, IBM and other social medias needed to keep sheeples happy and give em hope.

Hunker down folks gonna be rough ride.

Is Dell laying off  yet?  Seems like they are taking a beting or more like azz whipping

Sun, 04/28/2013 - 00:09 | 3506940 yogibear
yogibear's picture

Hp in the US is laying off.

Sun, 04/28/2013 - 07:41 | 3507172 GetZeeGold
GetZeeGold's picture

 

 

.....with orders for the rest of those still employed to not get sick.

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