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Lawrence Fuller
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Lawrence is the Managing Director of Fuller Asset Management. He has 20+ years of experience managing investment portfolios and serving the needs of individual clients. He began his career as a Financial Consultant in 1993 with Merrill Lynch. He worked for First Union Brokerage, Morgan Stanley... More
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  • An Earnings Update

    We are half way through earnings season for Q4 2012, and the numbers are falling well short of consensus estimates, again. The most recent update on index data through January 24 provided by Standard & Poor's on its website, accounting for 148 company reports, shows a significant decline in estimates for the quarter to just $23.84 from what was $25.29 at the beginning of the month. This is 5.7% decline! (Source: Standard & Poor's)

    We expect those that were more optimistic to take cover behind the notable increase in charges against operating earnings for underfunded pensions. The most notable announcements have come from Verizon (VZ) and AT&T (T).

    Still, should operating earnings fall below the $23.73 reported in Q4 of 2011 it will have been the second quarter in a row that earnings have fallen quarter-over-quarter and year-over-year. The last time we saw such a sequence prior to Q3 of 2012 was Q3 of 2007, just prior to the market top in October 2007.

    Disclosure: I am long T, VZ.

    Tags: T, VZ, Macro View
    Jan 29 4:05 PM | Link | Comment!
  • Did Weekly Unemployment Claims Really Decline?

    The Department of Labor reported that the number of Americans seeking unemployment benefits fell last week to the lowest level in five years. This was interpreted as a sign that employers are cutting fewer jobs, and that hiring is likely to pick up. The seasonally-adjusted number of 330k was very misleading. In reality, the actual number of people filing initial claims was 436k. This figure was an increase of 20k above the number of people that filed initial claims in the comparable week one year ago. It was the second week in a row that claims rose year-over-year, which hasn't happened in over two years. For no apparent reason, the Department of Labor increased the divisor they used last year from 144 to 166 to seasonally adjust the number. You divide 436k by 166 to arrive at 330k. This is what led to the perceived decline. We do our best to read beyond the headline, especially when the market refuses to do so.

    Jan 27 3:36 PM | Link | Comment!
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