Friends
Earnings season is at its peak this week and so far our concerns about earnings growth slowing have been verified. Unfortunately companies are struggling to meet or beat expectations both on the top line and the bottom line, and future guidance has been extremely cautious. So the earnings disappointments are not really a surprise to us, but what we are most interested in, is the action of stocks after the earnings release. There have been some huge drops from the likes of Google and Chipotle, but many of the companies that we follow seem to have had the lowered earnings expectations priced in. But in total, stocks are down so far during this earnings season, just not as much as it might have been considering the lousy numbers.
For the day, the Dow Jones Industrial Average was actually up 2 points (after having been down more than 100 points) to close at 13,345. The S&P 500 was up a fraction to finish the day at 1433. Gold was up $5 to trade at $1729 per ounce, while oil was down $1.32 to trade at $88.73 per barrel.
We have a lot of economic news coming this week (not the least of which is the first look at 3rd quarter GDP) along with dozens of important earnings reports, so we’ll keep you informed as to how it all lines up. It will be very interesting to see how far the bears can push the envelope. They need to break this thing while they have all this unsavory earnings news at their back. If they can’t, the bulls may just be emboldened for late year rally. Stay tuned.
Have a nice evening everyone. “Enjoy” the debate.
