"Probably Nothing..."

Please be advised, the following two charts may not be good for your wealth...

The almost unprecedented surge in stocks off the Mnuchin Massacre lows that bracketed Xmas Day has reinvigorated investors, commission-takers, and asset-gatherers worldwide in some Pavlovian belief that all is well in the world once again and it's just a matter of time before wealth is back at record highs and retirement walks along sandy beaches are being advertised on TV.

Sadly, as the following two charts show... there's no 'there', there.

While investors wish that three weeks of gains for the Stoxx Europe 600 meant that the market was getting ready for a stellar earnings season? Here’s the reality: neither investors nor analysts are expecting much good news from European companies...

In fact, European profit downgrades exceeded upgrades by the most since 2011.

We can see what happens when stocks attempt to "know better" than the earnings estimates.

“Market sentiment on earnings is cautious and fourth-quarter results are widely expected to disappoint,” said Emmanuel Cau, head of European equity strategy at Barclays Plc in London.

“Fourth-quarter estimates have been lowered and the sharp p/e de-rating of 2018 lowers the bar for positive surprises, but we believe that full-year 2019 estimates are still too high and will see further downgrades."

And US markets are no cleaner a dirty shirt to pin your hopes on as forward earnings expectations have plummeted (and continue to plummet) despite the v-shaped recovery in stock prices...

So, hey, BTFD, why not? Everyone else is doing it... after all, the slump in earnings expectations is "probably nothing."