An interest-rate hike next month is looking like a certainty. Warsh’s hawkish posture on inflation, which has remained above the Fed’s target for more than five years, comes at a time when corporate profit growth is at an unsustainable level. … Continued
US corporate profits are now down four quarters in a row from the record 2Q22, even as the sell-side has S&P 500 non-GAAP earnings growing 11.7 percent this year and 11.5 percent next. The gap between GAAP and non-GAAP in … Continued
NIPA profits are now down three quarters in a row. The downward momentum likely continues in an environment in which the fed funds rate has gone up by 500 basis points over 14 months. This will force the sell-side to … Continued
Next week, the 2Q earnings season begins in earnest. Equities took a big hit in the first half. The sell-side is yet to bring out scissors as relates to 2022/2023 earnings estimates. It will be even more disappointing if corporate … Continued
The 3Q earnings season begins in earnest this week. Leading up to this, the revision trend is up and stocks have come under a little pressure. Post-earnings reaction likely gets influenced by several variables, not the least of which is … Continued
Corporate bond issuance was strong in the first half. High-yield, in particular, is on course for yet another record year. The Fed essentially provided a backstop to corporate bonds in March last year, setting ablaze risk-on sentiment. Corporate profits are … Continued
The 2Q earnings season begins in earnest next week. Ahead of this, major equity indices are at or near their highs. The revision trend was positive throughout the quarter. Investors heavily bought into this. Their post-earnings reaction will be telling. … Continued
The sell-side, as well as equity bulls, have high hopes for S&P 500 earnings next year. Even if they come through, the gap between GAAP and non-GAAP will persist. US corporate profits adjusted for inventory valuation and capital consumption snapped … Continued
There is an air of invincibility among equity bulls. A contrarian-minded investor may find this uncomfortably lop-sided, but nothing says it cannot continue in a seasonally favorable period. The recent jump in investor sentiment is yet to translate into consumer … Continued
After the sharp contraction in economic activity in the early months this year, inventories are running low. Growth gets a tailwind as they get rebuilt. There is tight correlation between economic growth and corporate profits. Stocks are anticipating this. Home … Continued