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For Anyone Who Still Thinks Earnings Matter

Tyler Durden's picture




 

As Mike Tyson once ominously noted, "everyone has a plan until they get punched in the face," and it seems the rampage of equity bulls have some plan that many more prosaic fundamental analysis-based investors are unaware of (as we showed here). The 'punch' in the face will come; but in the meantime the following chart may be just the 'jab' that softens them up. As ThomsonReuters notes, of the 116 second-quarter earnings preannouncements given by S&P 500 companies, 93 of them have been negative, while only 14 have been positive. The resulting 6.6 negative to positive guidance ratio is the most negative since the first quarter of 2001. Nothing to see here, move along.

 

 

Of course - that doesn't matter - as we already know... fundamentals are irrelevant in a market of expanding hope-driven multiples...

 

because margin 'faith' is keeping the dream alive...

 

Charts: Barclays and ThomsonReuters

(h/t Brad Wishak At NewEdge)

 

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Mon, 06/10/2013 - 20:02 | 3644240 Pareto
Pareto's picture

All this money.  And nowhere to hide.

Mon, 06/10/2013 - 21:13 | 3644463 Rick Blaine
Rick Blaine's picture

A two-word phrase comes to mind...

Here's a hint - it rhymes with "Fonzie dream." 

Mon, 06/10/2013 - 21:27 | 3644514 TuesdayBen
TuesdayBen's picture

What is "Ponzi Scheme"?
Gubmint Fraud and Abuse for $400 please.

Mon, 06/10/2013 - 20:04 | 3644242 Dr. Engali
Dr. Engali's picture

Who needs earnings when the Bernank will print you as much money as you want? Hey Ben I'm a little short. Can you print me a billion or two? Thanks you're a real pal, the next drink is on me.

Mon, 06/10/2013 - 20:12 | 3644271 beekeeper
beekeeper's picture

I'm sorry. Free money is for club members only. - BB

Mon, 06/10/2013 - 20:20 | 3644297 SeattleBruce
SeattleBruce's picture

But I'm a member of Fight Club...

Mon, 06/10/2013 - 20:31 | 3644337 mckee
mckee's picture

The first rule is...

Mon, 06/10/2013 - 21:18 | 3644484 flacon
flacon's picture
The Rules of Fight Club.



1st RULE: You do not talk about FIGHT CLUB.

2nd RULE: You DO NOT talk about FIGHT CLUB.

3rd RULE: If someone says "stop" or goes limp, taps out the fight is over.

4th RULE: Only two guys to a fight.

5th RULE: One fight at a time.

6th RULE: No shirts, no shoes.

7th RULE: Fights will go on as long as they have to.

8th RULE: If this is your first night at FIGHT CLUB, you HAVE to fight.

Mon, 06/10/2013 - 20:24 | 3644318 otto skorzeny
otto skorzeny's picture

club members or tribe members? they are one and the same.

Mon, 06/10/2013 - 20:04 | 3644244 aint no fortuna...
aint no fortunate son's picture

earnings - how 20th century

Mon, 06/10/2013 - 20:33 | 3644343 Bay of Pigs
Bay of Pigs's picture

We don't need no stinking earnings!

Mon, 06/10/2013 - 20:07 | 3644252 wisehiney
wisehiney's picture

Tyler, could you do these articles and charts in braille please?

Mon, 06/10/2013 - 20:08 | 3644256 TheEdelman
TheEdelman's picture

Ben Bernanke, like Mike Tyson, is unbeatable.

Where is Buster Douglas when you need him?

Mon, 06/10/2013 - 20:08 | 3644258 Spitzer
Spitzer's picture

Is this a joke ?

 

Nothing matters

Mon, 06/10/2013 - 20:11 | 3644268 ACjourneyman
ACjourneyman's picture

Anyone have a good stock to short this bitch with, thinking Tesla puts might be the answer with a 40.00 call in 2 years.

Mon, 06/10/2013 - 20:12 | 3644269 ACjourneyman
ACjourneyman's picture

Anyone have a good stock to short this bitch with, thinking Tesla puts might be the answer with a 40.00 call in 2 years.

Mon, 06/10/2013 - 20:20 | 3644285 Ham-bone
Ham-bone's picture

GLD, SLV - going to zero...in so many ways.

Mon, 06/10/2013 - 20:18 | 3644289 gatorengineer
gatorengineer's picture

edz

Mon, 06/10/2013 - 20:13 | 3644274 JJ McApe
JJ McApe's picture

indeed fundamentals do not matter anymore. just how much the fed can pump into the system everyday.

this is no free market anymore. this is nothing but a farce. banks don't pay interest anymore and force savers into risky assets.

when you consider real inflation you lose 15-30% of your real buying power every year.

just end dat stimulus qe4 85b per month, raise interest rates to 3% and see what happenes.

Q.Q

Mon, 06/10/2013 - 20:27 | 3644327 disabledvet
disabledvet's picture

again "you will not hear me call gold a debt." the market corrects when the last bull thesis (p/e expansion due to New Normal conditions) is proven false. So far it has been true as in fact earnings have contracted...but multiples have expanded to compensate. there are a myriad of reasons behind this...not the least being "random events" which have had a major and positive impact on the the policy front. still...interest rates have risen at the long end, as the Fed "loses control" of that then obviously...in theory...equities should correct as a consequence. the irony of course is that if the Fed were to start going "hog wild" and monetizing the debt again it SHOULD be deflationary thus being VERY equity negative. that has not been the case "monetization to date" however (indeed the exact opposite has happened) so...based on this fact "we need to revise our thinking." my personal view was initially that QE would be INflationary not deflationary...so i've had to do a total rethink...that's why i was bullish on equities. if in fact it is deflationary however (and Japan and Europe are rolling over, interest rates are coming down globally, commodities are backing up, Ben Bernanke is walking on water and a 29 year just exposed America's Entire War Plan To Defeat the Terrorists) is the best thing to do...nothing?...continue to do...something?...i'm really unclear actually...other than that something must be done to stimulate growth in the US economy in the immediate term. my bet therefore is Christine Romer as Fed Chair...what was the question again?

Mon, 06/10/2013 - 21:02 | 3644429 NoDebt
NoDebt's picture

Well, there's something in there for everyone to agree with, that's for sure!

Mon, 06/10/2013 - 20:16 | 3644286 WTFUD
WTFUD's picture

Those "new orders" , is that a silver line?

Mon, 06/10/2013 - 20:27 | 3644291 ekm
ekm's picture

It's very tough for people who have not had totalitarian experiences to understand. I'm trying very hard to explain this it's been a long time.

 

Whenever the government gets directly involved with the economy, valuations do not matter. Let me repeat this again, anykind of valuation, stock market, bond market, bond yields, corporate balance sheets (corporate become an extension of the government), you name it anything and everything, IT DOES NOT MATTER.

 

Bonds, stocks, yields, earning, nada, nichts, zilch nothing matters. You know why: Because the logic goes, the government doesn't lose money.

Hence if the gov wishes, the gov can never ever ever ever lose controls of any paper or electronic market that uses valuations and I am talking  world wide control.

 

So, whenever people say, look at the yields, or the Dow, of the Vix, corporate earnings, forget it, just forget it, it does not matter.....until.........the REAL ECONOMY collapses, which is happening slowly but steadily.

 

Keep dreaming, keep talking yields and stocks. Nobody can call the top or the bottom of the middle, if the gov gets involved.

 

What the government CANNOT control is food production world wide. goods production world wide, crude oil extraction world wide..and that's when the whole thing collapses, since the whole thing is a derivative of the real economy and commodities, same as in 2008, 2000, 1987 etc.

It's coming, it's inevitable, it's very soon.

Mon, 06/10/2013 - 20:30 | 3644334 Everybodys All ...
Everybodys All American's picture

Gave you a thumbs up btw.

Imho that is usually when a stock market crashes. When everyone thinks it's never going down again. History repeats this act over and over again.

Mon, 06/10/2013 - 20:49 | 3644381 ekm
ekm's picture

It just slips out of hand but there are always obvious signs, always.

 

The most obvious sign: Currency swaps between BRICs, and even anglo allies like UK, Australia and New Zealand bypassing the dollar and doing barter with China.

Mon, 06/10/2013 - 20:31 | 3644339 SeattleBruce
SeattleBruce's picture

As powerful as the fed and its backers have been and still are, countries that settle trade outside of the dollar matter, and as you point out oil, food and other sorts of production that are not completely controlled by one lever matter, which is why ultimately the fiat reign of the fed and the USD will end.  Sometimes, I think we begin to think TPTB as omnipotent, but they are not.  Yes, there are tons of pricing misallocations throughout the world's economies.

Mon, 06/10/2013 - 20:37 | 3644351 fonzannoon
fonzannoon's picture

The market recovered extremely quickly after the 87 crash. Fairly quickly after the 2000 crash and very quicky after the 2008 crash. If that is all we are looking at then I need another hobby.

Mon, 06/10/2013 - 20:43 | 3644361 ekm
ekm's picture

It is in the nature of the process of control, that the controllers refuse to lose controls, until control abandons them.

Mon, 06/10/2013 - 20:45 | 3644365 ekm
ekm's picture

153k followers just crossed

https://twitter.com/zerohedge/followers

 

Mon, 06/10/2013 - 21:10 | 3644457 wisehiney
wisehiney's picture

How many top security clearance personnel (snoops) did the article say there were?

Mon, 06/10/2013 - 21:11 | 3644459 NoDebt
NoDebt's picture

Fonz- they're on the ropes this time.  You can see the policy desperation (don't listen to their words, just watch their actions).  If they lose control with interest rates at zero and the QE engine wide open, it's over.  No more bullets in the gun.  Then the capital controls and confiscation starts.  To say nothing of...... war.  Civil or otherwise.

Mon, 06/10/2013 - 20:19 | 3644293 scatterbrains
scatterbrains's picture

It's a simple bet.. has nothing to do with earnings or interest rates or inflation.  The question is how long can the crooks maintain control of the system?  That's it.  Go long if you think they can maintain the ponzi, nuetral if it looks like they are on the ropes and short the ever living shit out of it if you see any of them walking out in handcuffs.

Mon, 06/10/2013 - 20:19 | 3644294 candyman
candyman's picture

It should be called the great Wooden Nickles recovery of 2013, yahoo!

Mon, 06/10/2013 - 20:28 | 3644328 q99x2
q99x2's picture

Looks risky when you put it that way. Maybe the low average volume is additional risk.

On another note, Gun control is being pushed in the media now that the FEDs got caught preparing to blackmail everyone.

There is a TV in this house that an old lady listens to. I want to throw it out the window before it kills her but figure at this point in her life what's the use. She's successfully lived a free life.

Mon, 06/10/2013 - 20:38 | 3644353 ptoemmes
ptoemmes's picture

Setting up for the big beats?

Mon, 06/10/2013 - 20:48 | 3644377 thismarketisrigged
thismarketisrigged's picture

dont worry tyler, i never thought earnings matter.

although earnings should be a major factor about a companies long term growth potential, in the market, it means nothing.

 

whenever a company misses, as we saw plenty of this past quarter, the stock may sell off for a day or 2, but within a week at most from the sell off, the stock is right back at or beyond the price it sold off from.

 

earnings sadly mean nothing until this fucking criminal cartel fed gets the fuck out.

Mon, 06/10/2013 - 21:02 | 3644426 TwoJacks
TwoJacks's picture

someday this war's going to end

Tue, 06/11/2013 - 06:41 | 3645219 Its_the_economy...
Its_the_economy_stupid's picture

When did it start?

Mon, 06/10/2013 - 21:40 | 3644549 digilante
digilante's picture

Rosie does - but don't expect to see this missive front and center at ZH...

 

http://www.theglobeandmail.com/globe-investor/investment-ideas/notorious-bear-gets-bullish-on-profits/article12442992/

Mon, 06/10/2013 - 23:13 | 3644827 augustusgloop
augustusgloop's picture

diggler tante- 

read the article: CANADA. summary-better banks + commodity based economy.  that doesn't contradict any of the  jeremiads on ZH. 

Mon, 06/10/2013 - 21:42 | 3644553 ebworthen
ebworthen's picture

I'm watching Cramer (recorded on my VCR - remember those?  Still works great).

Cramer is trumpeting the S&P upgrading U.S. Debt Outlook.

And Spains Labor Minsistry saying unemployment is down by 100,000.

Oh - everything must be O.K. - BUY STAWKS!

ROFLMAO!

Mon, 06/10/2013 - 22:59 | 3644788 Aurora Ex Machina
Aurora Ex Machina's picture

No-one? Really? No-one going to do it?

 

Ok then.

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