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Analysts Are Slashing Guidance Ahead Of Q3 Earnings Results

Tyler Durden's picture




 

While CNBC's Bob Pisani prevaricates on low "high" volume rally days and "the important things," ahead of Q3 earnings and a horde of hungry commission-takers explain to a gullible public how fundamentals are strong (ignoring entirely the massive manipulation buybacks and financial engineering) and earnings will confirm the equity market's wisdom any day now; we thought it worth a glance at the dismal evolution of earnings expectations for Q3.

 

 

Since the start of July, S&P 500 Q3 earnings expectations have collapsed from 11.0% to just 6.4% with 9 of the 10 sectors lower and Consumer Discretionary now expected to see negative growth. But... that's probably not the important thing, right?

h/t @Not_Jim_Cramer

 

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Sun, 10/05/2014 - 18:57 | 5292099 deeply indebted
deeply indebted's picture

Weather? Too warm to shop, perhaps? It'll be better next quarter. Promise!

Sun, 10/05/2014 - 19:05 | 5292117 knukles
knukles's picture

"Taste of Africa coming to Dallas"

http://blogs.dallasobserver.com/unfairpark/we_apologize_in_advance_for_th/

You all wanna see a world economy strop "dead"?
Go ahead assholes, don't impose quarantines on W Africa.
On cities and areas with the sick and infected.

Go for the culling!

Sun, 10/05/2014 - 19:09 | 5292140 Richard Chesler
Richard Chesler's picture

Most discretionary budgets have been allocated to Obozocare. Forward!

 

Sun, 10/05/2014 - 19:13 | 5292162 Keyser
Keyser's picture

Corporations have run out of tricks to make their quarterly numbers after cutting staff to the bone, stock buy-backs, inventory tricks and inversions... Time for the pain in equities we all know is coming... 

Sun, 10/05/2014 - 20:08 | 5292349 NoDebt
NoDebt's picture

I think you're right.  Buybacks have been pretty much all the improvements in EPS the last few years.  Now they're loaded with debt from the buy-backs.  Unloading those shares (at a lower price than when they were bought) to raise cash in the next downturn will be a dowdraft-multiplier.

That being said, I've never been less than a year early on my calls.

Sun, 10/05/2014 - 20:36 | 5292464 KnuckleDragger-X
KnuckleDragger-X's picture

It'll be interesting to see how much paranoia they have programmed into HFT algo's....

Sun, 10/05/2014 - 19:43 | 5292148 philipat
philipat's picture

Don't worry, the earnings releases will be on the basis of EPS (After buybacks) and non-GAAP (Adjusting for "one-time" items like Wall St. legal fees and penalties)..

Sun, 10/05/2014 - 19:27 | 5292211 bbq on whitehou...
bbq on whitehouse lawn's picture

If its not god, then someone likes irony. Popcorn for the show anyone?

Sun, 10/05/2014 - 19:59 | 5292312 disabledvet
disabledvet's picture

This disease culls the cullers. That would be actual doctors.

How's that for spending a trillion on healthcare a year!

Sun, 10/05/2014 - 22:49 | 5292949 starman
starman's picture

Big deal I just consolidate my 80k debt from my  four credit cards and pay it off in like 10 - 20 years?  Kinda like the gov.

Sun, 10/05/2014 - 18:56 | 5292101 q99x2
q99x2's picture

It is important that monopoly corporations and banks lose massive amounts of money in order to save the planet. 

Sun, 10/05/2014 - 19:15 | 5292173 Keyser
Keyser's picture

And just how does an economic meltdown save the planet?  If you think this is Huffpo, then you're lost... 

Sun, 10/05/2014 - 19:00 | 5292110 Debeachesand Je...
Debeachesand Jerseyshores's picture

Defense companies aka "militaryindustrial complex" received some scraps from the tables by renewed bombing in the Middle East...

Sun, 10/05/2014 - 19:03 | 5292120 deagle44
deagle44's picture

strong dollar caught them by surprise.  6% earnings growth damn good considering the strong dollar.

Sun, 10/05/2014 - 19:09 | 5292121 deeply indebted
deeply indebted's picture

Who the hell needs Consumer Discretionary going into Christmas!?

Oh.. Wait.. I forgot, it's always going to be "better" next quarter. Got it.

Sun, 10/05/2014 - 19:08 | 5292134 TheRideNeverEnds
TheRideNeverEnds's picture

They are just preparing for this years highly anticipated new sequel.

Polar Vortex 3.0

Sun, 10/05/2014 - 22:06 | 5292780 jerry_theking_lawler
jerry_theking_lawler's picture

I thought it was polar vortex 4,510,124,971. Who knew we have only had 3???

Sun, 10/05/2014 - 19:08 | 5292136 nmewn
nmewn's picture

"Since the start of July, S&P 500 Q3 earnings expectations have collapsed from 11.0% to just 6.4% with 9 of the 10 sectors lower and Consumer Discretionary now expected to see negative growth."

Just a rounding error...lol.

Sun, 10/05/2014 - 19:25 | 5292208 kaiserhoff
kaiserhoff's picture

Not only that.  I'm pretty sure there will be "weather" in the fourth quarter,

and we know what that shit does to the economy;)

Sun, 10/05/2014 - 19:08 | 5292138 Cognitive Dissonance
Cognitive Dissonance's picture

Standard operating procedure. Promise them the moon, then convince the investor they received it by ignoring the past and promising the moon once again.

Sun, 10/05/2014 - 19:19 | 5292185 nmewn
nmewn's picture

Lower "expectations" to zero and then beat expectations by .02%.

What a racket...lol.

Sun, 10/05/2014 - 19:55 | 5292288 NihilistZero
NihilistZero's picture

I've been thinking a lot lately about the corrosive effects of the FED fighting the natural deflationary forces of a free market economy.  All these flipped crap-shack houses with lipstick-on-a-pig upgrades would be torn down and replaced in a sane market.  Construction could naturally flourish.  The volume of activity we could see given natural creative destruction would be staggering.  People want to spend money.  People want to build and buy things.  It's only when TPTB crush purchasing power to maintain there oligarchy does capitalisim NOT work.  Imagine a world where fortunes were made AND lost by the elites.  There would always be a mad scramble of assets and capital from week hands to strong.

The oligarchy detests prosperity for anyone but themselves.  As the saying goes "It is not enough that I win, my enemy must also lose."

Sun, 10/05/2014 - 20:14 | 5292368 nmewn
nmewn's picture

Yes, natural creative destruction, as much as no one wants to admit it, it is the law of the jungle and there is nothing wrong with that in the context of capitalism.

The weak are allowed to fail, in fact preyed upon by the strong because they suck as a viable profitable concern, never government subsidized...these are afterall only corporations we're talking about.

Aries K cars all around, on me ;-)

Sun, 10/05/2014 - 20:05 | 5292337 Cautiously Pess...
Cautiously Pessimistic's picture

I can just see our Kenyan American Leader standing in front of a banner now  ...  

 

M I S S I O N   A C C O M P L I S H E D!

Sun, 10/05/2014 - 20:20 | 5292391 nmewn
nmewn's picture

"Wall Streets doing great!" - Mr. Hard Pivot.

Sun, 10/05/2014 - 19:11 | 5292154 hegemony
hegemony's picture

Please! I am EXTRODINARILY negative about our economy but every quarter they slash em into earnings. Go ahead look it up

Sun, 10/05/2014 - 19:17 | 5292167 noob
noob's picture

WTF does an "Analyst" do?    - apropos  - the study of? - BWAH HA HA HAAAAA!   
"Analysts Are Slashing Guidance"...
oxymoron much? > Analysts / Guidance - BWAH HA HA HAAAAA!

Sun, 10/05/2014 - 19:24 | 5292202 TeethVillage88s
TeethVillage88s's picture

Mission, Objectives, Goals, Strategies, Press Releases, Investor Guidance, Sales Pitch, Forward Looking Analysis.

Customers are the Mark.

Sun, 10/05/2014 - 19:21 | 5292191 buzzsaw99
buzzsaw99's picture

ebola will do wonders for retail sales. ho ho ho

Sun, 10/05/2014 - 19:22 | 5292192 orangegeek
orangegeek's picture

Overlay of USD and S&P500 monthly - very telling

 

http://bullandbearmash.com/spx-inverted-relationship-usd-usd-sharply-spx...

 

USD has rocketed - but not much movement on the US indexes - yet.

 

Biggish POMO tomorrow - ends at 11a NY Time (EST) - good time to short into an up move, right Yellen?

 

 

Sun, 10/05/2014 - 20:01 | 5292315 AdvancingTime
AdvancingTime's picture

The term "the new normal" has not been used much as of late, but going forward it may be about to return. Many investors and the public at large may be about to realize that central banks can only do so much through printing money and lowering interest rates. Both these actions carry with them some very strong and nasty side effects.

Markets have become very distorted as money has flowed into risky assets in search of higher yields. It could be we are about to see the markets morph into a "realizing market", one that grinds slowly downward. Another possibility is that at some point the wisdom of buying every pullback changes and the market simply drops like a stone. More on what the future might hold in the article below.

http://brucewilds.blogspot.com/2013/06/realistic-expectations-for-econom...

Sun, 10/05/2014 - 20:02 | 5292321 Cautiously Pess...
Cautiously Pessimistic's picture

Oh boy... got pretty cool here last night in central Georgia.  Expect shoppers to go into hiding! 

Bye bye 4th Qtr GDP.... We hardly knew ye....        :(

 

(heading out to chop firewood and I am going to fashion a pair of snow shoes out of some old trash can lids)

 

Sun, 10/05/2014 - 22:08 | 5292788 jerry_theking_lawler
jerry_theking_lawler's picture

Wait, I thought it was HOT there the day before and that was keeping people home?

Which is it?

Sun, 10/05/2014 - 20:04 | 5292334 disabledvet
disabledvet's picture

Hmmm. "Short the tax base" that's fer sure. I mean whatever you think of sales "you can't tax what you don't earn."

A State cannot live on Bloodmoney alone it would appear.

Don't worry...the American people have learned to live with the non debtate on this as well. "Fukushima, Ebola, dropping bombs on civilians, the economy"...sometimes you really have to make it all about the nothing.

Mon, 10/06/2014 - 06:35 | 5293499 oudinot
oudinot's picture

"you can't tax what you don't earn"

Actually, a government can.

In Canada we have HST; it's a 13% tax on pretty much all transactions.  When you INVOICE (not paid) you have to pay the 13%.  I have a client who has not paid for 2 years; I wrote it off as a bad debt and applied to get the HST back that I had paid on invoices where I did not receive any monies.

The govt. has refused and now I am going to tax court.

Sun, 10/05/2014 - 21:59 | 5292749 firstdivision
firstdivision's picture

Simple game played.  Slash right before earnings release, bam, they beat expections.  magical stock levitation ensues. 

Mon, 10/06/2014 - 09:56 | 5293960 aztrader
aztrader's picture

How much you want to bet that when the earnings are announced, Bubble TV will say that they beat earnings estimates and ignore that they were cut just weeks earlier.  The analysts are in bed with the companies massaging earnings to beat.  This ponzi has been going on for 5 years, but now they are leveraged to the hilt and have no where to run. 

This will get ugly, just when is the question.

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