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As Q1 earnings season kicks off, the overall tone is more bearish than usual and negative...

As Q1 earnings season kicks off, the overall tone is more bearish than usual and negative company warnings have outpaced positive revisions nearly five-to-one. Earnings growth is expected to gain by just 1.6%, compared to 6.2% last quarter. The negative warnings are also higher than usual - with 108 negative revisions for S&P 500 companies. When compared to the 23 positive revisions, it is the worst pace in 12 years.
Comments (12)
  • Macro Investor
    , contributor
    Comments (8466) | Send Message
     
    I think the sky is dropping, we should sell everything and buy gold.
    9 Apr 2013, 08:01 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3304) | Send Message
     
    Now now, let's be serious MI - the negative warnings will turn into pleasant surprises when the real earnings are presented.
    9 Apr 2013, 08:08 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8466) | Send Message
     
    Can't we have a moment of doom and gloom, please?
    9 Apr 2013, 08:13 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3304) | Send Message
     
    You know we have too many of those moments on this site! Sometimes I feel like falling on my sword.
    9 Apr 2013, 08:19 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8466) | Send Message
     
    Betting against the popular sentiment on this site is extremely profitable.
    9 Apr 2013, 08:22 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3304) | Send Message
     
    I've been 90% in the market since the 80's, I'm an investor, not a trader. No bailing out - yet I've done well.
    9 Apr 2013, 09:14 PM Reply Like
  • Ohrama
    , contributor
    Comments (506) | Send Message
     
    Let us give a week. The negatively revised earnings expectations will become the norm to compare with the actual earnings and bingo we will have positive surprises and then we can take the market higher for a merrier ride!
    9 Apr 2013, 08:50 PM Reply Like
  • mike mohr
    , contributor
    Comments (451) | Send Message
     
    Nothing matters as long as Fed pumps $85 Billion a month into the market.
    As a matter of fact bad earnings are good because bond will rally. Low Interest rate + $85 Billion POMO a month will push S&P over 1650 or higher.
    9 Apr 2013, 08:54 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3304) | Send Message
     
    And another who doesn't understand QE - one day it will be gone and no one will even know it. It's all psychology.
    9 Apr 2013, 09:16 PM Reply Like
  • User 5938141
    , contributor
    Comments (7) | Send Message
     
    Maybe. Or maybe the recent rally reflects 2013 income that was drawn into late 2012 in the hyperventilation leading up to the fiscal cliff. The money had to go somewhere...

     

    That said, with margin debt hitting historic maxima, and without a "great rotation" it begs the question, who's buying at 1570+? If you think it's a simple case of POMO sliding into equities, then why are excess reserves still increasing?

     

    I'm not saying you're wrong, necessarily. I just can't spell out the exact mechanism by which you are right. At least not without some bleeding in between 1650 and now.
    10 Apr 2013, 12:38 AM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    Asset price inflation and manipulated markets. What is there not to like here? Haven't you heard: It's the only game in town!
    9 Apr 2013, 10:19 PM Reply Like
  • HPBunker
    , contributor
    Comments (219) | Send Message
     
    Right, and to buy stocks now is "contrarian" because of all the "gloom and doom". You can tell there's way too much "gloom and doom" because the VIX is at historical lows, the Dow and S & P are at historic highs, ditto for margin debt and institutional investor sentiment, and of course CNBC is yelling "Buy, Buy Now, Buy Right Now!!" every minute of every day (except for weekends when they only run infomercials).
    9 Apr 2013, 11:23 PM Reply Like
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