This page has been archived and commenting is disabled.

Global Earnings Downgrades Worst In 12 Months

Tyler Durden's picture





 

As we head into earnings season in the US (amid hopeful margin expansion), the big picture for earnings remains bleak. Markets are back close to highs as negative guidance is piling up and as Citi notes, their global earnings revision index is at its worst since early July 2012. If the Fed is heading towards a Taper then this fundamental fear may once again become relevant - or hope-fueled multiple expansion will fill that gap.

 

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 07/05/2013 - 14:47 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Has somebody done a Rumplestilskin over at ZH?

Who needs earnings anymore to drive equity markets?

Fri, 07/05/2013 - 15:04 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Indeed, likewise there is no taper. Watch what they do, not what they say. Purchases are actually increasing as someone has to buy all that paper garbage.

Fri, 07/05/2013 - 15:08 | Link to Comment flacon
flacon's picture

Wow, can you imagine the flip side to this coin in a couple of years.... company X reports earnings and everyone sells. Bad earnings and people sell. Good earnings and it's an opportunity to sell the spike.  

Fri, 07/05/2013 - 15:20 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Does it really matter with "mark to fantasy" accounting? No, trade like a "pro", use inside information, buy a politician, etc. etc.

Sat, 07/06/2013 - 08:06 | Link to Comment Lets Buy The Dip
Lets Buy The Dip's picture

Finally someone who gets it +1 matey! Its all on rumours......nothing has been done at all yet, FED BS, and FED rumours.... What else will be next. The Elite are running the show, not the fed. So I agree with you. 

oh, and also....forget the BS news ....check out the Weekly DOW chart looks amazingly good ==> http://bit.ly/14TRH9G

Fri, 07/05/2013 - 14:47 | Link to Comment ThunderingTurd
ThunderingTurd's picture

Am I reading the chart wrong or is negative guidance super bullish for global equity performance?

Fri, 07/05/2013 - 15:18 | Link to Comment ZerOhead
ZerOhead's picture

Nope... super-bullish is the call. The worse the earnings get the more you make.

Thanks to the indispensable help from the Fed... the entire equities market is now firmly based on the same concept as credit default swaps...

Fri, 07/05/2013 - 14:49 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Oh, and those 1.8% GDP prints, keep em coming. As long as it's not negative, new highs are guaranteed.

Markets don't need GDP anymore either, since earnings have become superfluous to price.

Fri, 07/05/2013 - 14:55 | Link to Comment Jim in MN
Jim in MN's picture

And heaven forbid anyone look at the latest real personal disposable income per capita charts from Doug Short...

 

http://www.advisorperspectives.com/dshort/updates/DPI-Monthly-Update.php

er, wait, I said NOT to look at this!  What am I doing???

 

 

Fri, 07/05/2013 - 14:51 | Link to Comment slaughterer
slaughterer's picture

Samsung warning today was a big deal not only for Apple.   Consensus is for a very bad earnings season across nearly every sector, both top and bottom line.

Weird how Rosenberg is all sunny and excited about today's Jobs' Report.  Is he suffering from some type of Stockholm Syndrome or is his employer threatening to kick him out if he does not cheer up?

 

Fri, 07/05/2013 - 14:52 | Link to Comment Jim in MN
Jim in MN's picture

Well campers, looks like we're all set up for a Super-Duper Oopsie Pooper (TM) of a market crash-a-pa-looza.

I'd put in September-November for a solid 20%+ ass whooping on the major equity indices.  Maybe 40% just to make it scary enough.

Then they can blame the Fed and Assad and Snowden and hope we forget by the midterm elections.

The question, of course is what alarming emergency measures do TPTB have in mind for anal insertion into the populace during this next prefab 'crisis'?

Any guesses? 

Remember the rules: it has to be incomprehensibly hideous to have any chance of actually happening.

Fri, 07/05/2013 - 15:38 | Link to Comment Cdad
Cdad's picture

I could not agree more.  Looking at today's price action reminds me of the early 2008 period.  Just nothing there...no one home...random price action...zero volume.

However, as for what horrible things needs to happen...I think we are actually beyond that.  I think this 4 year long HFT weave could just quietly come apart for very mundane reasons, maybe earnings, maybe a small policy gaff, something simple.  And I'm thinking very fast too...down 20% premarket kind of thing.

It is over, folks.  It was over 2 weeks ago.

Fri, 07/05/2013 - 15:49 | Link to Comment franzpick
franzpick's picture

Close the equity markets, freeze the values and mark all prices up quarterly with a 1-2% Cost Of Carry Adjustment: call it a COCA COLA.

A fixed return equity market:  FREE.   Hideous enough?

Fri, 07/05/2013 - 14:53 | Link to Comment SheepDog-One
SheepDog-One's picture

Whole world run on FREE MONIES! Yayyyyyyy!!

Fri, 07/05/2013 - 14:53 | Link to Comment slaughterer
slaughterer's picture

Guidance should be horrible with a strong dollar and WTI well above $100.

Fri, 07/05/2013 - 14:58 | Link to Comment involuntarilybirthed
involuntarilybirthed's picture

It is reported that the Fed will include air bags with all new stimulus money.  And a recall in September for faulty brakes. 

Fri, 07/05/2013 - 15:03 | Link to Comment thismarketisrigged
thismarketisrigged's picture

earnings will be better than expected, because they are expecting nothing, so its almost impossible for them to disappoint.

 

that being said, earnings will still suck in general, but not realtive to expectations which are basically nothing.

 

either way what difference does it make, any company that misses its earnings will just sell off that day and go to new highs 2 days later.

Fri, 07/05/2013 - 15:05 | Link to Comment Chupacabra-322
Chupacabra-322's picture

I think everyone should follow World Bank whistleblower Karen Hudes, still recognized as their chief counsel by the finance ministers of 188 countries (kahudes.net). Here is a paper she frequently cites called “The Network of Global Control” which provides a formal mathematical demonstration that a small group of a few hundred people are a supra-national entity that controls the world economy and has captured the political processes of the transatlantic nations

S. Vitali, J.B. Glattfelder, and S. Battiston: The network of global corporate control

Table S1: Top 50 control-holders. Shareholders are ranked by network control (according to the threshold model, TM).

Rank Economic actor name
1 BARCLAYS PLC
2 CAPITAL GROUP COMPANIES INC, THE
3 FMR CORP
4 AXA
5 STATE STREET CORPORATION
6 JPMORGAN CHASE & CO.
7 LEGAL & GENERAL GROUP PLC
8 VANGUARD GROUP, INC., THE
9 UBS AG
10 MERRILL LYNCH & CO., INC.
11 WELLINGTON MANAGEMENT CO. L.L.P.
12 DEUTSCHE BANK AG
13 FRANKLIN RESOURCES, INC.
14 CREDIT SUISSE GROUP
15 WALTON ENTERPRISES LLC
16 BANK OF NEW YORK MELLON CORP.
17 NATIXIS
18 GOLDMAN SACHS GROUP, INC., THE
19 T. ROWE PRICE GROUP, INC.
20 LEGG MASON, INC.
21 MORGAN STANLEY
22 MITSUBISHI UFJ FINANCIAL GROUP, INC.
23 NORTHERN TRUST CORPORATION
24 SOCIÉTÉ GÉNÉRALE
25 BANK OF AMERICA CORPORATION
26 LLOYDS TSB GROUP PLC
27 INVESCO PLC
28 ALLIANZ SE
29 TIAA
30 OLD MUTUAL PUBLIC LIMITED COMPANY
31 AVIVA PLC
32 SCHRODERS PLC
33 DODGE & COX
34 LEHMAN BROTHERS HOLDINGS, INC.
35 SUN LIFE FINANCIAL, INC.
36 STANDARD LIFE PLC
37 CNCE
38 NOMURA HOLDINGS, INC.
39 THE DEPOSITORY TRUST COMPANY
40 MASSACHUSETTS MUTUAL LIFE INSUR.
41 ING GROEP N.V.
42 BRANDES INVESTMENT PARTNERS, L.P.
43 UNICREDITO ITALIANO SPA
44 DEPOSIT INSURANCE CORPORATION OF JP
45 VERENIGING AEGON
46 BNP PARIBAS
47 AFFILIATED MANAGERS GROUP, INC.
48 RESONA HOLDINGS, INC.
49 CAPITAL GROUP INTERNATIONAL, INC.
50 CHINA PETROCHEMICAL GROUP CO.

http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf

Fri, 07/05/2013 - 15:06 | Link to Comment ejmoosa
ejmoosa's picture

The Fed alone is injecting $85 billion.  If they were not, and those same dollars had to be replaced, they would have to be coming from profits.

So, in effect, the Fed is substituting $85 billion of month of profits that we are not producing.

That has kept companies from mass layoffs and shutting down.  

But when they stop injecting....it all falls apart.

 

Fri, 07/05/2013 - 17:36 | Link to Comment ZerOhead
ZerOhead's picture

They are injecting $85B a month alright but very little of that is ending up in the real economy... and thus not in corporate revenue/profits unless you are a financial concern...

There is the effect of some interest rate relief for Main St. which mitigates the cash bleed and increases homeowner borrowing ability... which means they can't and won't stop the injections unless: 1) a true recovery is occuring, or 2) it's a temporary suspension to create the crash and fear needed to sell the next massive $T banker benefiting 'rescue package'...

This economic recovery better shift into high gear soon somehow or we are doomed...

Good luck Ben. (I actually mean it!)

Fri, 07/05/2013 - 15:37 | Link to Comment TWSceptic
TWSceptic's picture

The worse the economy gets, the higher stocks will go. This as we all know is the opposite of what should happen, but it's the result of government and central bank intervention. Meanwhile gold will keep going lower until the fed can no longer pretend.

However people calling for deflation are wrong, there is only temporary disinflation and not even in all asset classes. If the economy doesn't get worse, inflation will be back because of increased money velocity. If the economy does get worse, the fed will have to admit tapering is no longer an option. This will also mean inflation.

Fri, 07/05/2013 - 15:34 | Link to Comment Archetype
Archetype's picture

Yet stock market ramped after those bad july 2012 guidances... Nothing to see here...

Fri, 07/05/2013 - 15:39 | Link to Comment devo
devo's picture

The Bernanke adding to his "reserves"...gonna be tough marking to market after he owns the entire market.

Fri, 07/05/2013 - 15:37 | Link to Comment devo
devo's picture

Multiple expansion from trimming all the fat that could be trimmed. S&P is one lean cut of meat. Good luck, paper bugs!

Fri, 07/05/2013 - 15:43 | Link to Comment devo
devo's picture

The only argument for stocks is "buy them because they keep going up"...that's their only fundamental. Even QE is wearing off...seeing a ton of houses for sale in CA...old trapped money getting out while they can. This is one giant shitstorm headed toward a wall-splattering fan.

Fri, 07/05/2013 - 15:59 | Link to Comment disabledvet
disabledvet's picture

earnings don't matter if you're going through the biggest energy transition in over a century...and the first since then the last one (from coal to oil) i might add. the capital expenditures are so massive that in effect "those are your earnings." i do agree...if you're sitting on anything of an "internal combustion regime" prepare to start melting it down...it's pretty much worthless. premium leather seating looks good. it better be heated though...i'm picky.

Fri, 07/05/2013 - 16:08 | Link to Comment Racer
Racer's picture

They lower the bar for earnings beats to sub basement levels so the companies just stroll over them

Do NOT follow this link or you will be banned from the site!