P/E multiples will be in flux for the next few months. Phase I will begin in October. Phase II will begin in January. The sequence will look something like the following: Analysts: Many sell-side analysts will revise their December quarter Revenue and Earnings estimates downward coming off of the September quarter earnings calls beginning in … Continue reading P/E Multiples In Flux
Real GDP: If the Atlanta Fed is correct, Q3 will be the third consecutive weak GDP quarter given the bank's Q3 Real GDP estimate of 0.3%, which follows two consecutive negative Real GDP quarters.Inflation: We expect inflation to be sticky when the CPI is reported on October 13th. Core CPI will remain elevated largely due … Continue reading GDP, Inflation, Yields, Currency & 2023 Earnings
If the Fed raises by 100 BPS tomorrow we believe there is another 10% downside to the NASDAQ before October earnings. We believe the NASDAQ will continue to work lower as the Fed hikes its Fed Funds Rate and as Treasury yields climb. We expect the Fed's rate hiking will stop by early next year … Continue reading A NASDAQ Bottom. QT Or Not To QT?
We have written on a number of occasions over the past few months that we believe the NASDAQ Composite will bottom at 9,000. By when? By March 2023. That's 7 months from now if you include March 2023. We need two things to happen in order for investors to capitulate: First, we needed the Fed … Continue reading How Quick To NASDAQ 9,000?
Today's market sentiment feels a lot like 2008 when investors where sanguine about the early days of the credit crunch which eventually ballooned into the Great Recession. My experience covering Technology companies in 2008 was that many Equity analysts and investors did not have a clue what a credit crunch was. All they knew was … Continue reading This Market’s Sentiment Feels A Lot Like 2008
This "bad news is good news" trade that has persisted over the past 2-3 weeks is nonsense. Ask yourself: "what is coming next"? Earnings: On the earnings front, 2022 and 2023 Revenue and EPS estimates are coming down later this month. Within the Technology sector, investors will see the impact of this with soft Ad … Continue reading Bad News Is Good News Is Nonsense
If you missed the latest episode of our TEK2day Podcast, you may access it at the YouTube link below. Episode 443 covers Ad-driven and Consulting-focused business models from the perspective of how they fare when the macro-environment softens. Episode 443 is a follow-up to our recent TEK2day article: Get Ready for EPS Misses https://youtu.be/PV6QdIPurHA
The SEC estimates that climate disclosures will cost small cap companies approximately $420,000 per year on average and $530,000 for larger public companies. The winners will be law firms, accounting firms and the SEC at the expense of companies. It is logical that this type of punitive legislation and time-consuming disclosure will push out IPO … Continue reading The Next Government Regulation to Hit Earnings
On March 31st we told investors to be prepared for weak earnings. After almost 30 years in the capital markets one lesson learned is that sellsiders are slow to publish bad news. Therefore it is not terribly difficult to predict that the sellside will lower EPS estimates for 2023 and beyond when the June and … Continue reading Earnings Estimates Will Be Revised Downward
One thing that's for sure is that many companies are hesitant to get in front of bad news. Given that inflation in all forms is not going anywhere, we expect many companies to report Revenue and Earnings shortfalls in April as March quarter results and 2022 full year outlooks are communicated to investors. Inflation has … Continue reading Get Ready for EPS Misses