Just 3 WTF Earnings Charts

If a picture paints a thousand words, these three charts should write an entire book about the "market's" earnings...

Chapter 1: Bottom-Up Ugly

While the constant jibber-jabber on business media proclaims 'earnings are awesome... in fact everything is awesome', the truth is an oddly divergent reality. Net earnings revisions have been positive only 12 times in the last 104 weeks...

Chapter 2: Top-Down Hockey Sticks

Despite these chronic historical downward-revisions, Forward S&P 500 EPS estimates continue to surge (driven by large market cap effects and the hockey-stick hopes and dreams)

Chapter 3: Keeping The Dream Alive

Which leaves, the disconnect between 12-month forward index P/E and consensus EPS growth rates getting a little extreme...

Chapter 4: Time's Up

If Blackrock is right that the corporate bond market is broken and unprepared for the "stress" of a withdrawing fed, then exactly what will keep this divergent dream alive as the ability to fund cheap buybacks dries up faster than a broad coalition of Western allies invading Syria.

*  *  *

h/t @Not_Jim_Cramer

Bonus Chart: Of course, we have the Fed's "other mandate" now of financial stability to maintain the wealth creation...

Comments

[SheepDog-One]

We're sitting in the back seat with drunken teenagers at the wheel, that's all.

[Oldwood]

High times followed by a crash?

[dressguard]

Be quiet! This is the new normal!

[Winston Churchill]

We are locked in the damn trunk. I just wish we were on the backseat.

[Oldwood]

Everything seems perfectly normal to me.

[starman]

Hangover is a bitch! So why do we drink again?

[Al Huxley]

The current market theory is that the best way to avoid a hangover is to stay drunk.

[Winston Churchill]

Worked for me for years,or was it decades.

[aztrader]

Is that PE ratio based on GAAP or Non-GAAP earnings?..............

[Major Major Major]

Kind of

[besnook]

lots of room left in this bubble. this balloon was made from a latex oversize condom.

[WTFRLY]

Roundup + Agent Orange: Dr. Oz calls out EPA over glyphosate, 2,4-D combo herbicide Enlist Duo

http://wtfrly.com/2014/09/22/roundup-agent-orange-dr-oz-calls-out-epa-ov...

[Major Major Major]

It's just margin expansion.  You get more for less or less for more.

[Honey Badger]

Great articles on the Hedge today!

[PistolShrimp]

Earnings revisions have historically always gone down. Basically analysts start out the year optimitically, then get realistic by the end of the year. So, negative earnings revisions are the norm and not a sign of underlying weakness..Check out: http://www.businessinsider.com/wall-street-earnings-expectations-errors-...

[CHX]

It's the final count-DOWn, tata ta taaaa, ta ta taa taa taaa, ...

[Ancientkarma]

The best I can offer in two words......MORE!...WAR!.... mORE! ....WAR!