Tag Archives: profits

U.S. Stocks: Look for Stronger Performance in Second Half of 2015

At the end of 2014 we explained why “stocks are expensive, offer mediocre risk / reward.” The weak 2.5% price rise so far this year is consistent with that call. But stocks should be stronger in the second half because … Continue reading

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S&P Is Not GDP: Why Profits Fall While GDP Is Growing

The media, and many of the econo-pundits they interview, are befuddled by the current profit picture. Why, they wonder, will Q1 profits decline materially while the economy continues to grow? They get that energy earnings have collapsed, but isn’t there … Continue reading

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Equity Market Outlook: Still Mediocre but Not Terrible

January’s 3% decline in the S&P 500 is consistent with my observation on December 30 that “Stocks Are Expensive, Offer Mediocre Risk / Reward.” The main issues are: Investors and strategists have become bullish and complacent; they were far more … Continue reading

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Q3 Earnings: Off to a Strong Start

Based on results so far, I believe investors will conclude in mid November that third quarter profits were fairly good and better than feared. The big exception, which will surprise no one, is the energy sector, which will weigh on … Continue reading

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Stocks: Where We Stand

They will rise this year, but not dramatically.  Early in 2013, when the Street was cautious, we expected “valuation levitation,” which happened.  Late last year we warned rising complacency would lead to higher volatility, but we stayed positive as investors … Continue reading

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A Whiff of Complacency

Exactly a year ago we wrote a prescient post titled “Muted Expectations Could Set the Stage for a Positive Stock Market Surprise.”  Analyzing Barrons’ survey of 12 equity strategists, published in early September 2012, we suggested (incorrectly) that their forecasts … Continue reading

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Defending Profitability: This Is Not Your Parents’ S&P 500

A few weeks ago I had lunch with the strategist for a major buy-side firm who has been correctly positive on stocks.  He said the biggest push-back he got on his bullish call was that profits would be weak.  It’s … Continue reading

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Q2 Earnings: Good Enough

The second quarter S&P 500 bottom-up EPS estimate is around $27.00 and should creep higher during the rest of earnings season.  This is consistent with strategists’ full-year 2013 estimates of $108-110.  Results are not great but good enough for stocks … Continue reading

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Liquidity Over Corporate Results? Climbing the FT’s Wall of Worry

The folks at the Financial Times are trying to make sense of the U.S. stock market rally, which, it is fair to say, has surprised them.  Here is their take and my brief response: The state of the world economy … Continue reading

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Q1 Profits: Soft, but Good Enough for Further Valuation Levitation

The media does a terrible job of covering profits.  Here are a few tips. First, forget about the percentage of companies beating consensus, which is always way above 50% because companies guide estimates to a number they can beat. (Some … Continue reading

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