Displaying items by tag: earnings

Monday, 04 February 2019 11:17

Beware of Big Earnings Declines

(New York)

We ask you, readers, to name the single most important factor that has supported stock prices through all the turmoil over the last year. We bet more than half of you uttered “earnings” to yourself. Earnings have grown strongly in the last year, something that helped keep prices stable despite big geopolitical worries. However, there pillar of the market may now be crumbling as analysts have just turned the earnings outlook negative for the first time in three years. Analysts now expect first quarter earnings to decline by almost 1% from last year. By contrast, at the end of December, expectations were for a 3.3% gain. Most expect the weakness to come from margins, not top line growth.


FINSUM: Continued strong earnings were supposed to be one of the positives this year. If earnings sputter out, what is there to hold up the market in the face of so much uncertainty?

Published in Eq: Total Market
Monday, 04 February 2019 11:12

Don’t Wait for Analysts to Turn Bullish

(New York)

A lot of investors are nervous to put their money back in markets. The big losses of December have given way to a great start to the year, but investors are still shy because of the volatility. Well, JP Morgan says investors need to get back in markets soon as waiting for analysts to turn bullish again has a history of being a poor idea. Generally speaking, analysts can be a year behind actual market moves, so if investors wait until the mood improves, they will have already missed out on a lot of the gains.


FINSUM: Worries about forthcoming earnings aside, the market definitely has a renewed spring in its step and we are generally feeling bullish given the now lower valuations.

Published in Eq: Total Market
Monday, 14 January 2019 09:56

A Bad Sign for Wall Street

(New York)

If you are keeping an eye on financial stocks, this morning held a very bad omen. Citigroup was the first big Wall Street bank to report earnings, and the numbers weren’t pretty. In particular, the ever important area of fixed income trading revenue was disappointing, with total revenue dropping 21% to the lowest in seven years. The company missed its full-year profitability target by a wide margin.


FINSUM: The reason this is so worrying is that the fourth quarter was a very volatile period for markets. Such environments usually send trading revenue surging for banks.

Published in Eq: Financials

(New York)

One of the most well-known finance professors in the nation, Jeremy Siegel of Wharton, says that the market looks sets for a great stretch. The catch is in order for that great run to happen, we need to avoid a recession. According to Professor Siegel, “My feeling is that the market is virtually positioned for a mild recession, but I just don’t think that it’s going to happen … If we avoid a recession, we’re going to have a really good market”. He continued “I think we swung too positive last summer and now I think we’ve swung too negative”. Siegel believes that if a recession does hit, the market is in for another 5-10% fall.


FINSUM: We would have to agree. This selloff, which has corresponded with great earnings in 2018, is basically a recession already being priced in (maybe not quite), so if the recession never comes, at some point there is going to be an “all clear” rally.

Published in Eq: Total Market
Thursday, 01 November 2018 10:41

Why the Big Selloff Won’t Hurt the Economy

(New York)

The market seems to have finally regained its footing after a very turbulent couple of weeks. This selloff felt different than any in recent memory and serious damage to the market’s psyche seems to have been done. But what might it say about the wider economy? The answer is little, according to the Wall Street Journal. The selloff will probably be just that, a market fall. In reality, tech companies, which led the losses, reported very solid earnings, with margins expanding very well. Little can be drawn from the results that might show the economy is in trouble.


FINSUM: The only aspect of this selloff we are somewhat worried about is how it might impact consumer confidence and spending this holiday season. However, so long as the market stays strong this month, we expect the impact to fade.

Published in Eq: Total Market
Page 10 of 16

Contact Us

Newsletter

Subscribe

Subscribe to our daily newsletter

Top
We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…