Earnings Estimates Are Now Realistic 2020 EPS estimates have fallen so much that they are now realistic. Bad news is based on 2020 estimates, the stock market is expensive. Specifically, the 2020 EPS estimate fell from $178.96 at the start of the year to $132.75. That means the current S P 500 PE ra
Investors Got Too Positive On Wednesday It’s pretty obvious investors were euphoric on Wednesday to any observers of the market. Even if you are bullish like me, you know the market got ahead of itself. Nasdaq was almost positive year to date. Now it’s time for a pullback. We started the decline on
Jobless Claims Fall Again Some traders decided that the stock market always rallies on Thursday because it seems like the stock market likes high jobless claims in the near term. They believed that because stocks would have been on a long Thursday winning streak if it wasn’t for the Gilead news last
Huge Rally To New Bear Market Highs It’s tough to quantify what we are seeing in markets. It’s a mixture of extreme euphoria and extreme pessimism. That makes no sense, but we are in unprecedented times. To further explain, almost everyone thinks the stock market is expensive, yet the action has bee
Q1 GDP Growth Was Bad Q2 Will Be Worse Q1 GDP report showed -4.8% growth which missed estimates for -3.7%. 2.25% of the decline actually came from healthcare because elective surgeries were delayed. This is the worst growth since the last recession as the chart below shows. The chart also includes O
Stealth Rally In Stocks The stock market is forward looking. It has been rallying on the decline in new COVID-19 cases, stimulus, and the expected end to the shutdowns. This index has been helped in the past few weeks by the fact that the companies the least hurt/helped by this shutdown are huge com
Weak Earnings Guidance In a shock to no one on the planet, Q1 earnings season has been weak and guidance has been mostly non-existent. The situation is so unusually negative that when a company reports earnings and gives disappointing guidance, it’s a positive because at least there was guidance. We
Huge Rally In Small Caps Even though the stock market has rallied in the past few weeks, there hasn’t been pure optimism about COVID-19 getting better until Monday. That’s because the work from home stocks such as Amazon and Microsoft along with the bubble stocks like Zoom and Shopify have been lead
Low Income Workers Usually Get Hurt A non-consensus viewpoint is in this cycle the lowest paid workers will get hit less badly than they usually do in relation to the rest of the labor market. As you can see from the chart below, the bottom 50% of workers by net worth had the biggest decline
Nice Friday Rally (Week Still Down) This wasn’t as big of a rally as some of the ones we’ve seen in previous weeks, but it was very nice as it ended the week on a solid note. The stock market was down slightly this week as expected. Specifically, it rose 1.39% on Friday and fell
