From the desk of Willie Delwiche.
It’s no secret that the market has been a mess and this morning I made the case to Chuck Jaffe on the the Money Life Show why we feel that it likely resolves higher.
Click here to give it a listen.
Expert technical analysis of financial markets by JC Parets
by Peter
From the desk of Willie Delwiche.
It’s no secret that the market has been a mess and this morning I made the case to Chuck Jaffe on the the Money Life Show why we feel that it likely resolves higher.
Click here to give it a listen.
by Peter
by Peter
From the desk of Willie Delwiche.
If there is something to know about me when it comes to the market, it’s this: When I have a chance to talk about the Value Line Geometric Index, I don’t let it pass. The Value Line index is still a smidge further below its June high than the S&P 500 is from its September high, and the Value Line index has not (yet) re-claimed the lead on a YTD return basis. But over the past month, it has provided some leadership, showing the S&P 500-based indexes the path through the 50-day average. While the cap-weight index (SPY) has changed little over the past month, the equal-weight index (RSP) is up nearly 2% and the Value Line index is up more than 3%. I continue to believe that will be the theme of the fourth quarter.
by Peter
This is the video recording of the October 14th Weekly Town Hall w/ Willie Delwiche
10/14/21 2PM ET [Read more…]
by Peter
From the desk of Willie Delwiche.
It’s mid-October and things are winding down in the garden.
The greens have perked up as the weather has turned cooler. But attempts to ripen a few final tomatoes as the summer heat fades and the sun spends less and less time above the horizon is like waiting for Godot.
With peak garden season slowing down, I have enough time (and thyme) on my hands to reflect on what went well, and what went awry.
by Peter
From the desk of Willie Delwiche.
Key Takeaway: Optimism has been unwound, but pessimism remains scarce. We have yet to see a level of fear associated with a complete unwind in sentiment. Still, risks loom overhead with earnings season heating up and the prospect of disappointing news on the horizon. The tailwinds that have accompanied the market for the past 15-months have dissipated. Analysts no longer revise expectations higher, and breadth is weak with more new lows than new highs across the NYSE and Nasdaq combined. Caution could quickly turn into nervousness and fear without a supportive backdrop in the event less than stellar news ushers in price volatility. It’s important to remember that sentiment resets slowly then all at once. We’ve been through the slow part. Now it’s time to see if the market can withstand a potential bout of disappointment.
Sentiment Report Chart of the Week: Growth Expectations Making the Turn
Earnings season gets plenty of attention – most of it (in my opinion) for the wrong reasons. What a company made last quarter matters a lot less than what its prospects are going forward. Stocks tend to do well when earnings expectations are rising, and not so well when they are falling. Median S&P 500 earnings growth for the year ahead has peaked and is falling and for the first time in over a year, more companies are trying to guide expectations lower rather than higher.
by Peter
From the desk of Willie Delwiche.
Key Takeaways:
The past year has been one of widespread earnings surprises and large upward revisions. Whether those trends can remain intact as Q3 earnings season gets underway is one of the more important questions the market has to wrestle with right now. Expectations are elevated going into the quarter, but a number of the factors that fueled the earnings strength of the past year are starting to ebb. I have my suspicions that Q3 earnings season will be a repeat of the recent past.
At the end of the day, price is what pays. We don’t want to forget that, but we also want to keep an eye on whether (and how) investors’ expectations are being met or not. In each of the first two quarters of 2021, the earnings growth rate at the end of earnings season was nearly 30 percentage points higher than what was expected when the quarter ended. That is a clear case of expectations being exceeded – and to a historically high degree.
by Peter