26 May 2020

Economic Growth Expectations

Last week, I saw an interesting table from Goldman Sachs that estimated economic growth across the globe. The table looked exactly like the first four columns of this table, including the various highlights.  Those columns show the annual inflation adjusted (or ‘real’) growth rates for those economies. I took their data and annualized 2020 through 2022 to see what they expect in the first year of the downturn and what… Read More

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13 Apr 2020

Coronavirus & Earnings Season

Earnings season kicks off this week, and although we’ve seen a few economic data releases, earnings announcements will offer a lot of information about how the coronavirus is impacting companies. Right now, according to FactSet, earnings are expected to be lower by 10 percent compared to the first quarter last year.  If that’s the case, it will be the largest year-over-year decline since the third quarter of 2009, when the… Read More

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21 May 2018

Why Aren’t Stocks Higher?

At this point, 93 percent of S&P 500 stocks have announced their first quarter results, which means that earnings season is almost over.  The expectations for earnings were relatively high at the beginning of the season, as Wall Street analysts expected that earning would grow by 11.3 percent. In fact, it was a blow out earnings season, with FactSet reporting that the blended average earnings grown at 24.5 percent –… Read More

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9 Apr 2018

Tariffs, Profits and Global Growth

Concerns about a trade war flared back up again last week.  The US released a list of proposed tariffs on some $50 billion worth of Chinese imports.  The 25 percent levies reach broadly, including medicine, aviation, semiconductors and consumer goods like dishwashers, snow plows and motorcycles. Beijing was quick to respond with reciprocal tariffs, announcing $50 billion on 106 products including soybeans, automobiles, chemicals and aircraft.  Some analysts pointed out… Read More

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15 Jul 2016

Earnings Season is Upon Us

As you can see in the chart below, earnings season is upon us.  While 31 companies have already reported, a full 421 companies report in the next three weeks, leaving the last 48 companies to report during the rest of August and September. Analysts aren’t expecting much out of earnings season and think that earnings will decline by -5.6 percent. According to FactSet, it will be the first time that the S&P… Read More

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12 Jan 2016

Earnings Season is Upon Us

The headlines have been filled with major macroeconomic news from China and elsewhere that have pushed stock prices lower. It’s perfectly legitimate to factor this news into stock prices because our collective fortunes are tied together whether we like it or not.  If Chinese gross domestic product falls substantially, you can be sure that ours will drop as well along with growth prospects for US companies. Last night, earnings season… Read More

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22 Oct 2015

Profits Are Falling (Again)

Someone once told me that the price of a stock should only change four times per year – when investors receive new financial information about the business in the form of an earnings release. Obviously, it doesn’t work like that, but it’s an interesting idea. In any case, earnings season is upon us and based on the third quarter data so far from FactSet, it doesn’t look pretty.  While only… Read More

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3 Aug 2015

Lower Oil and Earnings: A Tough Combo

We are now almost three quarters of the way through the current earnings season and, so far, earnings are down around -1.3 percent from last year according to FactSet. That’s much better than what markets were expecting at the outset of the quarter, which was -4.6 percent as 73 percent of companies reported results better than analyst estimates. Results in the energy sector have been especially terrible, falling -57 percent… Read More

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