Name one of the strongest patterns of this earnings season.
That's right, weaker revenues.
Below are 3 charts that Goldman Sachs Global Economics,
Commodities and Strategy Research team published on Friday after
120 companies in the S&P reported. ZeroHedge made these public
Again, this is only about a quarter of the S&P and we have
170-some companies reporting this week. But it is good early
evidence of something Sheraz has been seeing in the data for weeks:
How long can "lean and mean" corporate America keep squeezing
more profits from fewer dollars?
There have also been some FX-related issues (stronger dollar)
with earnings, but let's not get into that since FX flows are
always part of the stormy seas corporations must endure. And the
positive correlation between strong stocks/weak dollar will endure
too as the S&P v the buck floats around +0.5.
Another interesting aspect of this earnings picture is how much
a strong company and stock like Apple can carry the day, or the
year. Goldman researchers also track the S&P 500 Equal Weight
Index to seperate out the effects of mega-caps.
I have been watching the chart of this index (SPXEW) for a month
now and it is fighting to stay above its 200-day moving
So, do you think this week's 173 reports can turn the tide of
falling revenues (or, rather "raise" the tide)?
Or, given the weakening macro backdrop, is this due to continue
and does this mean lower stock prices are inevitable
-- especially as estimates are only due to come down?
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