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Q3 Earnings Warnings Second-Worst Since 2001
US companies are warning about Q3 earnings at the second highest level since 2001, with estimates well below what they were just three short months ago. Of course, the US equity markets don't care - having rallied aggressively in the face of this collapse; lubricated by multiple-expanding QE and rev. repo. As Reuters reports, companies issuing negative outlooks outnumber positive ones by 5.2-to-1, the most negative since the 6.3-to-1 ratio in the second quarter, when however the "second half recovery" (which has been once again indefinitely delayed, perhaps to the third half?) was said would take place momentarily and lead to another mythical rebound. Industrials, Materials, and Tech top the list for negative pre-announcements.
Third-quarter earnings for S&P 500 companies were expected to increase by 4.6% compared with a year ago, down from a forecast of 8.5% on July 1.
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Technology is the sector with the highest number of third-quarter negative outlooks, with 27 warnings. Among them was Autodesk Inc, which anticipates lower demand for its computer-aided design software used in construction, manufacturing and engineering.
Consumer discretionary companies have the second highest number of warnings, including Target Corp. Target said in August that shoppers remained cautious and that its new Canadian stores were not doing as well as anticipated.
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"there's a lot of noise right now that's driving sector performance, and not the fundamentals."
Of course, the complete disconnect between corporate profitability and forward earnings, has been well-documented, but just in case some have forgotten here it is again.
(h/t @Not_Jim_Cramer)
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Well, "investors" don't buy stocks because of past earnings, it's because of future potential.
Just wait until everybody refinances their houses at 3% and buys an extra iPhone and BMW. Earnings to infinity!
Green shoots and sperm shots for everyone compliments of the wall street pimps.......
Same old story
Same old song and dance
If ZH wasn't so cutting edge I would have thought it had jumped the shark with this story, but this is a story that truly is evergreen. Good for Ben Shalom Bernanke and his ability to levitate the markets desptite the pull of gravity.
Warnings mean analysts will guide their EPS estimates down slowly so even the worst companies will beat on the crucial day.
Yup. And RETARDED 'investors' everywhere will BTATFH---thinking they got a bargain!
Read that headline again . . . SECOND Worst. We're still not at Worst Worst levels. Plenty of time to turn this train around. Not that it will help since the train went off the cliff awhile back . . .
Yeah, stop with this shit, there is a genuine crisis right now concerning a Gov shut down. the hell with this small change earnings shit, if they can just raise that debt ceiling another trillion or 2...no more worries
And if we got to 'worst' levels, that would still be WAY better than expected!
DOW +200.
2nd worst since 2001...that leaves what between then and 2013.
i'd say about 12 years, including 2008-ish.....
but hey, they were happier back then.
:)
The Forrest Gump economy.........
. . . where sometimes you get the turd covered with powdered sugar?
One never knows.... when one has an IQ lower than the fat content of the candies.
Stupid is as stupid does...
I think Congress needs to start running (and I don't mean for office).
Fundamentals don't mean anything in Bernankeworld.
Don't you love it when "analysts are surprised?"But WHY?
Shit happens at the margin in economies, or so the pointy heads tell me anyway. So even if the top 10% do account for the majority of the consumer spending, it still matters what those of us in the bottom rungs are doing. So nobody should be surprised that the <$50k/annum folks are not spending. ~20% are unemployed or under employed. Reduced spending at some point will mean reduced earnings. Simple math, is it not?
I've been waiting to see multi-unit residential investment properties reach a value I thought was attractive - from the challenge that current tenants have making rent, increasing costs and expense of government regulation, I have little desire to own or manage any additional rental property.
you don't rent to renters silly. you think blackstoneand fortress and the other bought all those 'rental' properties to rent them to people?
they rent them to the government and the govement puts 'section 8' familys in. all .gov guaranteed (until it ain't).
FEAR! PANIC! LOATHING!
Must....Deliver....Free Monies.....
Sounds like a convincing reason for stocks to rally to new highs. When stocks should be down... they're up. When stocks should be up... they're Uppier. There is no more down. Down has officially been removed from the trading mechanism. There is only Up... UPPIER... and UPPIEST. Corrections? Sphhhhaaaaw... correction shmorrections. Down? No such thing. I told you already. Deal with it.
And remember boys and girls... Don't Fight the Fed.
This Public Service Announcement brought to you by the Zimbabwean Department for Public Betterment, where our motto is "Mubutu Mgabwe BwaHaHA 7.62 MBele in your fucking head man."
or... "Smile and Like It or 7.62 to the Back of the Skull."
ZH, Where the soaring fantasy of the S+P500 and the crashing reality of the fundimentals bisect.
Think... When worlds collide.
That's the news from Lake Wobegone, where all the children are above average.
Third half recovery... lolz.
don't any of us ever learn? so - if you haven't here's the game. they warn and then they BEAT!!! yippee!
"companies issuing negative outlooks outnumber positive ones by 5.2-to-1, the most negative since the 6.3-to-1 ratio in the second quarter,"
so if i'm pickin up what your layin down, they expect the third quarter to be bettor than the second quarter.
:)
so i read the comments and found them interesting, given that they all accepted the title as context setting:
Q3 Earnings Warnings Second-Worst Since 2001as oppossed to saying:
Q3 Earnings Improving over Q2Just sayin,
:)
and further to the learning - this is huge win/win
#1 - for those that care, the government is spending less, that a big ++ because it means gov. can spend more elsewhere (go figure, but that's the logic).
#2 - more people on 'furlough' means..... come on kids, come on dmn it! - MORE TIME TO SHOP!
#3 - halloween coming up. i don't have to show up for work, means i'm spending on a costume and parties.
#4 - can we make it to thanks giving?? no .gov? that's great!!! more time to shop for a bigger turkey, as i'll be home more to eat more leftovers infront of more football.
#5 - let's not even get into xmas shopping. do you know how many people didn't get sht last year because i ran out of time because of that dmn job i had?
let's hope this goes well into next year - huge consumer plus all around - and there's no doubt the banks well be xxxxxxxxxxxxx-tending credit to shoppers.
But whoa, hold on a sec.....
The MSM, WSJ and the whole bunch of swells on the radio have been very re reassuring that everything is super good - stocks up, housing, unemployment way down.
Unicorns, bunnies and rives of chocoate.
You don't mean to tell me it is all bullshit do ya? Just a massive disinformation campaign to keep the can kicked through the 2014 mid terms so we can go full retard with Pelosi?
That's fine. I'm absolutely convinced nothing will bring the American sheepeople out of their coma until the twig breaks - so better now than later.
PE ratios are soooo last century.
You don't need earnings; you need good accountants and only the best lobbyists.
As long as they put the bar low enough to casually walk across, even if deeply in the red, it will be now see as BEAT EARNINGS EXPECTATIONS!!!!!
massive headline BEAT,
Company loses one quadrillion gold coins, but this is a HUGE result, the company thought they had lost one quadrillion PLUS one gold coin but
THEY FOUND THE ONE GOLD COIN THEY LOST!
So now it is ONLY one quadrillion ... result... beat expectations that they lost TWO gold coins.
Stock soars to the moon and beyond on better than expected earnings
Here is the proof
Q3 profits are crap therefore QE4 is great than QE3 and means the existance of QE5 to Infinity...Intergrated!
Curious - what ever happened to those Hindenberg warnings?
They were just floating a few trial balloons.