Earnings Season AKA 90 Day treadmill is here….expectations versus realities

Today Alcoa (AA) unofficially kicks off earnings season. While we are uncertain as to how this company has become the name sake for the beginning of earnings season (90 day treadmill) we acknowledge the line must be drawn in the sand somewhere, and that we are digressing.

For many Wall Streeter’s the infamous 90 day treadmill (earnings season comes at you like a perpetual treadmill every 90 days, such the name) is all about expectations versus realities. Continually companies cleverly manage expectations down throughout the quarter only to surprise to the upside, although not in all cases.

Here is a chart from Standard and Poors of Q2 2012 earnings for the S&P 500 from a year ago until lately.

Clearly a year ago, this quarter’s earnings had greater expectations, however as of late, this seems very doable.  The devil is always in the details and we will see how the macro economy has changed managers outlooks.

While the fourth of July marks the official start of vacation season for many on Wall Street (expect lower trading volumes), sometimes also known as the summer doldrums, given the awkward Wednesday holiday last week, we will be in full throttle mode this week, so keep those email boxes empty as we have a lot of catching up to do!

Have a Great Week! We will be in touch a lot this week!

JK

214-706-4300 www.jkfinancialinc.com

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