click for larger graphic
chart courtesy of WSJ
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Was it Japan’s Livedoor investigation and market disruption? Iran’s nuclear ambition? Oil at $68? Avian flu?
No.
I’ll say this as plainly as I know how: A wide cross section of blue chip companies shit the bed.
Major Misses on Revenue, Earnings or Guidance
Dupont
Alcoa
Yahoo
Intel
Apple
eBay
GE
Citibank
This wasn’t company specific, this wasn’t sector driven, this is not a technical call. This is the Crème de la Crème of corporate America, acknowledging a slowdown in the economy. Period.
If there is another rational explanation, I’d sure like to hear it . . .
Barry, I read your blog religiously everyday, but I am a little bit confused recently. You said the market would go to 2600 first then plunge in second half of the year, however, with Corporate America already showed the signs of slowdown, like your analysis here, is it still possible for market to rocket up in the first place? are you re-considering your forecast at the moment?
I believe this is also what Rev and Cody are concerned too. You were bashing the market while holding long positions.
I am holding bearish view too, but with different journey. 2006 high could be already in.
Barry,
Your headline is a little misleading. The Dow is down for the year but the S&P 500 and Nasdaq (as well as a bunch of other indices) are still up for the year. I guess it depends on how one defines “the markets”. Nonetheless, there’s been a TON of technical damage done to the markets this week.
I do agree with you about the impact of earnings in all of this. But I also think it’s a perfect storm scenario when you factor in all the other world events.
these guys can always manipulate earnings, they’ve been doing it for years, particularly GE (their low tax-rate jumped off the page). the amazing thing is the revenue misses. i think both GE and C came in at 3%, only 1/2 the growth rate analysts (and presumably the companies, because the analysts dont say shit until they’ve been fed a mouthful) were projecting. now the fact that 3% lines up w GDP and these monsters shd at best be delivering GDP-like revenue growth still begs the question: how’d they miss so bad
I think the biggest lesson 2005 taught us was that nothing really matters except for liquidity. Because of FED rate hikes global liquidity shrunk in 2005, now the financial markets MUST follow liquidity as they always do.
The question is whether Bernanke will be able to cur rates. It depends on the international inflation environment, notably, will the Chinese and OPEC increase their consumption more than their capacities?