Tag Archives: Earnings Week

90 Day Treadmill Confession Time Begins-Expected Winners and Losers

90 Day Treadmill-Earnings Season

Alcoa’s, (AA) earnings release Monday April 11th, marks the unofficial start to the 90 day treadmill confession season, better known as earnings season.

Over the next several weeks thousands of public companies will report their results for the last 90 days, with each company’s management team focused on painting as positive of picture as legally possible.

A singe digit number of residents of our favorite domestic index, the S&P 500, report this week, with a much greater group reporting next week and peaking in member reporting the following week.

As we begin the season, here is what investors are expecting according to Thomson Reuters:

  • S&P 500 Growth this Quarter versus the same Quarter a year ago (Y/Y): 11.6% 

The two winning estimated earnings growth sectors:

  • Materials and Energy with a 35% and 32% expected Quarter Y/Y growth.

The two losing estimated sectors are :

  • Utilities and Telecommunication with losses expected of -4.8% and -3.6% Quarter Y/Y respectively.

We will keep you updated as the estimates become results, and market participants voice their opinions.

Have a Good Day!


Earnings, Earnings, Earnings-Currently One of the busiest weeks of the Quarter

This week marks one of the busiest week for earnings of the quarter as many companies begin reporting their 90 day treadmill results.

As we had said in an earlier post, earning season is going well.

You might ask why the markets are not acting well? When markets turn tail and begin a downward move, almost every stock within the capital markets comes along without discretion. Even companies reporting excellent results are often pulled down by their peers.

The tugging downward of good companies by their not-so-do-well brethrens makes for excellent investment opportunities.

Is the Glass Half Full or Half Empty?

Have a good day!


Nice Start to Earnings Season – Remember today is a Witching day

With the unofficial start of earnings season marked earlier this week, Alcoa,  which disappointed many investors, we began to take a few deep breaths in anticipation of a tough season.

Fortunately Alcoa was the exception, not the rule, as for the most part, earnings have been good, with company managers gaining confidence in their outlook, customers, and future for the year, which bodes well for employment i.e. As growth and confidence from a company level increases, hiring of employees will most likely follow.

Lastly, today is a Friday Witching, which means synthetic contracts expire, this usually puts short-term unforseen trading pressure on stocks and the indexes along with extreme total market volume.

Have a Good Weekend !


Earnings Update and Seasonal Trends in the Capital Markets

With over 90% of the S&P 500 companies reporting (90 day treadmill), we give the season a B+, and seasonally we are starting a good time of the year.

Capital Market Companies continue to struggle (although somewhat less) with sales, but due to strong cost cutting (increased productivity) most are providing reasonable bottom line (Net Income/EPS) growth.  As a side note, looking over the next few quarters most companies will have easier comparisons, as sales and EPS rates, fell off a cliff this time last year, especially consumer related companies.

Historically, please do not put too much weight on this factor because Capital Markets have made a dramatic move since a worst case Armageddon scenario was taken off the table in most investors minds earlier this year, Capital Markets tend to do well in the last two and first months of the year.

Why does this happen?

In our opinion, many investors may be looking to improve performance in their investment portfolios to gain greater returns for year-end materials (i.e. Pamphlets, brochures and flyers).  Also, as the end of the year makes it way to investor’s calendars, a happy time greets many with regards to time away and family time, offering many a more positive view towards economic trends.  The beginning of the year often marks heavy cash inflows as bonus, year-end shore ups of cash, and delayed investments, make their way into the Capital Markets.  While anything can happen, 2008 for example, all other factors being equal (which they never are) history and momentum favor an upward bias in the Capital Markets for the next 90 days or so.

This is of course our opinion and history can always be re-written at any time.

Have a Good Day!


Earnings Season, An Update from the Front Lines–Unintended findings, Future Employment??

As we near the heart of earnings season, our internally named, 90 day treadmill, we wanted to give you a brief update on our findings.

As a comparison to last quarter’s earnings season, More Clues: U.S. Jobless Rate, A Take From Recent Earnings and Longer Term A Need for Higher Personal Emergency Funds we had many companies who were making their numbers on the bottom line, Net Income, but missing on the top line.

As of this time of the season, we are seeing more top line (sales/revenue) growth numbers as well as continued bottom line/Net Income beats.

This is very good news for a continue capital market growth, but also, longer term for unemployment numbers.

Higher Sales = Eventual need for more employees

Overall, so far we give earnings season a B+

Have a good day!


Columbus Day Today, Fixed Income Closed, and a Slow Start to a Fast Earnings Week

Columbus Day is observed today, leaving the Fixed Income and banks closed, but tomorrow brings a full slate of earnings.

Today, Fixed Income Markets (Bonds and Banks too) are closed in observance of Columbus Day. A quick review of earnings reports due, shows only a few today, but looking  later into the week, we will get a great read on the economy as many companies from various sectors of our country will report their earnings.

As a quick review of earnings season, here are a few high points from our standpoint:

  • Larger Companies have bigger impact due to their diverse income portfolios
  • Guidance trumps current earnings (A great report for this quarter will not matter if companies guide lower in the future)
  • Early reporters will set the tone for the season (This week reports will set the momentum for the season)
  • Bad reports from close competitors will up the scrutiny of all fellow companies in the same industry

Have a Good day !

Donald and I will be out most of the day today at an industry event.