This spring when I said the NASDAQ would bottom around 9,000 my thinking was as follows:

• 2022 would be a year where higher interest rates reset equity valuations lower, especially as it relates to the NASDAQ Composite.
• 2023 would be a year where poor company fundamentals reset equity valuations lower. The NASDAQ has experienced some of the latter during the Q3 earnings season (as we predicted), yet many companies refrained from discussing their 2023 outlook on the Q3 earnings calls, and therefore many analysts will need to revise 2023 and likely 2024 estimates downward when companies report Q4 results in 2H January and 1H February.

Here is a little secret: analysts and the general public for that matter have as much insight into the macro environment as company management teams do. Therefore, it is better to revise estimates downward now rather than wait two months. Otherwise, what value does the sells-side provide?

Related Articles:

• Earnings Estimates Are Too High
• P/E Multiples In Flux
• GDP, Inflation, Yields, Currency & 2023 Earnings

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