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Q2 2013 Earnings Week 1 Cheatsheet
Despite terrible negative-to-positive pre-announcements...
... global earnings revisions fading fast, and plunging analyst' earnings downgrades; according to Bloomberg data, S&P 500 Earnings are expected to grow over 8% in Q2 2013 as we head into this season with top-line revenues growing almost 5% (with Consumer Discretionary expected to deliver around 10% growth).
With Alcoa kicking us off this evening and likely being extrapolated for at least one trading day (although it is the lowest market cap name in the Dow by far), we note the top-down and bottom-up fundamental trends that 'support' this market. With only 20 names reporting this week, it is relatively quiet, though Friday may have some fireworks when JPM and WFC report their realized losses and loan-loss-reserve-subsidized gains.
Charts: Bloomberg and Ransquawk
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I'm concerned that low earnings may be construed as being bullish....
ie: "Lots of growth (there's that f-ugly word 'growth' again!) potential for next quarter, bettery buy it now!"
I know that police are allowed to lie, and so are central bankers and policy makers, but are corporations allowed to lie about their earnings? That's legal right? After all things may be getting desperate.
Yes, it's called mark to market accounting.
roBUST
AA miss and it's played down as stock specific story.
AA beats and it's telling us macro environment is strong.
Works that way every earnings season. AA is not relevant when they miss but hugely positive inidcator if they beat. Always a joke.
....they miss and it will be blamed on the aircraft industry or reduced beer consumption, etc.
All that really matters is how many sell side puppets get on CNBC to talk up stocks....
Bad news all priced in--buy high, sell higher.
......or, all the bad news is not rpiced in so the Fed will throw money at the PD's.....can't lose....just buy.
yup thats what they said on CentralNewsBankingComedy or CNBC when markets are low it can only go up and so when earnings and revenue growth are low they can only go up as well. I call this the FEDMETH effect.
Earnings will not matter too much as long as they beat the analyst estimate. Even if earnings are down 50% from last year, they will still be viewed as positive as long as they beat the estimates. Whatever earnings come out as, they will be twisted by Wall Street's socialistic logic to be positive. Buy everything. Crashes are now impossible and any correction beyond 5% is extremely unlikely as lemmings are programmed to buy any and all dips.
crashes are possible. let the US equity markets stretch, let the P/E ratio get worse, let the market go parabolic. patience.