The mother's milk of stock market returns is turning increasingly sour...
Earnings season took a dark turn on Wednesday, according to MarketWatch's Ciara Linnane and Tomi Kilgore, when the majority of companies reporting numbers for the December quarter missed on sales and lowered their outlook for the rest of the year.
This weakness in overall corporate earnings growth could bode badly for the broader stock market, as it represents the actual impact of geopolitical concerns, the slowdown in China, the weakness in oil prices and productivity, said Karyn Cavanaugh, senior market strategiest at Voya Investment Management.
So, do these two charts scream at you to "Buy the F##king Dip"?
As we detailed previously, the S&P 500 is on track for its fourth straight season of negative sales, according to FactSet data, the longest such negative streak since the four-quarter stretch from the fourth quarter of 2008 to the third quarter of 2009.
Per-share earnings are looking at a deeper decline of 6.3%, wider than the 6.2% reading on Tuesday, according to FactSet. That would be a third straight quarter that earnings decline.
“When the Fed was back-stopping everything, people were willing to pay a little more for earnings,” Cavanaugh said. Now, she said the question has become: “Why would you pay more for the same exact thing you got last year?”