Post-earnings stock reaction to the leading US financials has been negative. Ditto with how INTC and IBM were treated. This week and next, the top six companies report. Amidst elevated investor optimism and surging margin debt, reaction to their results … Continued
On Inauguration Day, US stocks pushed further into record territory. Concurrently, several indicators already find themselves in uncharted territory. The ongoing earnings season can decide if already-extended further extends into extended territory or unwinding begins. US stocks welcomed the Joe … Continued
Georgia Senate results have pretty much ensured a new round of stimulus money as well as a fresh infrastructure package. Stocks had a massive 4Q, with the S&P 500 jumping 11.7 percent. This helped push the price-to-sales ratio further into … 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
With investor sentiment elevated and help from the Fed, margin debt and foreigners, major US equity indexes remain near highs. Bulls are positioning for a Santa rally, followed by the onset of 4Q earnings season in the first half next … 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
Small-caps and tech continue to diverge. Post-vaccine news, longs are gravitating toward the former and leaving the latter. Amidst this, signs of fatigue are also showing up on the S&P 500, while VIX acts like it wants to rally. The … Continued
Stocks increasingly are beginning to price in a possible democratic sweep on November 3. Both small- and large-caps staged important technical breakouts last week. They are liking the prospect of more stimulus, that is rising budget deficit. If this scenario … Continued
US corporate profits collapsed 21 percent in the first half this year. Directionally, this is in line with operating earnings estimates for S&P 500 companies. In the latter’s case, the revision trend has improved the past two and a half … Continued
The recent selloff in equities has come at a time of elevated Fed balance sheet, stabilizing earnings estimates and improving macro data. Either stocks believe these positives are not lasting or they are falling under their own weight, as they … Continued