Revenue growth that has finally turned a historic corner, because while on the last day of 2014 there was still some hope that S&P500 sales will still grow even if at a very muted pace, as of Friday - for the first time since Lehman - full year revenue growth is now projected to turn negative!
The chorus of companies complaining against the Fed's strong dollar policy just saw one more addition, when moments ago WalMart- which reported better than expected numbers but disappointing guidance - said that "like many other global companies, we faced significant headwinds from currency exchange rate fluctuations."
It will get much worse.
By reviewing the earnings transcripts from the companies of the S&P 500, Goldman Sachs notes 4 key themes emerge from the maelstrom of double-speak, bravado, and actual data (GAAP or non-GAAP). Without question the US Dollar strength is a drag on multinationals and CEOs are resolute in that (despite mainstream media prognostications that 'king dollar' is "unequivocally good") but what CEOs and CFOs seems just as resolutely positive about is that while macroeconomic and geopolitical uncertainties still exist in Asia and Europe, they expect solid US economic growth in 2015. It appears - given the data - they will be disappointed.
All you need to know about the latest melting ice-cube "business model" in just three charts.
On the surface, Twitter's Q4 numbers were good, with the company clocking in $479MM in revenue and $0.12 in EPS on consensus estimates of $454MM and $0.06. Of course, on a GAAP basis things were much uglier, with the company reported a loss per share of $0.20 cents in Q4, and a net loss of $577.8 million for 2014. However, as everyone knows, TWTR's value is not about its numbers, or rather adjusted numbers, but its user growth: after all the company has about a billion monthly active users it needs to catch up in order to compete with Facebook in total user engagement. And it was here that the company stumbled.
The earnings season is all over except for the shouting, but the outcome doesn’t remotely validate Wall Street’s happy times narrative. Reported Q4 earnings for the S&P 500 companies (with about two-thirds reporting) stand at $25.02 per share compared to $26.48 in the year ago quarter. That’s right. So far Q4 profits are down 5% but shrinking corporate profits is something that you most definitely have not heard about on bubble vision. But that’s just the tip of the iceberg. We have had a tremendous inflation of PE multiples during the last three years in anticipation, apparently, of the US economy hitting escape velocity and the overall global economy continuing to power onwards and upwards. As is evident from the financial news and “incoming” data, however, that presumption is not remotely correct.
ECB's Jazbec: QE Could End Sooner Than Sept. 2016
What happens if one expands the Eurozone NIRP universe to include the debt of other countries including Japan, Denmark, Sweden, Switzerland and so on? Conveniently, JPM has done the analysis and finds that a mindblowing $3.6 trillion of government debt traded with a negative yield as recently as last week. This represents 16% of the JPM Global Government Bond Index, or in other words nearly a fifth of all global government debt is now trading with a negative yield, meaning investors pay sovereigns, using other people's money of course, for the privilege of buying their issuance!
According to the NY Fed, 177 tons of gold have been withdawn from its vault in 2014; according to foreign central banks, at least 207 tons of gold were withdrawn from the NY Fed in 2014.
Did a Fed intern make a very glaring math error or is something else going on?
Facebook reported $1,133 billion in GAAP earnings: exactly the same as a year ago. What happened to non-GAAP income from operations during the same period? It rose from $1.5 billion to $2.2 billion. Again: this is in a period in which GAAP income remained unchanged!
The U.S. government is already bankrupt. This is old news to anyone who has been following the number-crunching of individuals such as former Reagan economic advisor, Professor Lawrence Kotlikoff. The U.S. government, the greatest debtor in the history of the world, claims that it is about to (finally) raise interest rates, which have been permanently/fraudulently frozen at 0% for now over 6 years.
Welcome To The Wreckovery: Who Could Have Possibly Anticipated Caterpillar's Disastrous Earnings And Guidance?Submitted by Tyler Durden on 01/27/2015 08:54 -0400
Well, pretty much anyone who had read any of our CAT monthly sales reports over the past 2 years.
Market Wrap: Futures Tumble On Spike Of "Strong Dollar" Earnings Disappointments And Profit WarningsSubmitted by Tyler Durden on 01/27/2015 08:25 -0400
Following yesterday's earnings disappointments, most notably from Microsoft which is down 7% this morning following the usual after-the-fact downgrades from JPM, Citi and Nomura, futures were already on a the back foot heading into this morning - no doubt impacted by the deja vu ridiculous move in the EURCHF noted earlier - when the latest batch of earnings just hit, of which Dow component Procter and Gamble stood out and which missed the top and bottom line. But the punchline, and in direct refutation of what Jack Lew said previously about a strong dollar being good for the US economy, was this:"The outlook for the year will remain challenging. Foreign exchange will reduce fiscal 2015 sales by 5% and net earnings by 12%, or at least $1.4 billion after tax." In other words, P&G will "offset" the surge in the USD with more layoffs. So when Jack Lew said "good" he really meant "bad."