Number one. What is likely to play out is Not a one day scenario, but it will play out imho.
The stock market is as much of a belief system as our collective acceptance of FRN as a medium of exchange.
The investment system sells the future price of a company based on future expected earnings or value if bought by another company.
Todays earnings are being compared to earnings of both the previous year and previous quarter.
Company’s are being attacked on multiple fronts.
1.) The easy comparison against Covid numbers are fading into the comparison history. In my estimation the ‘easy’ beat against Covid sales and earnings have juiced the comparisons are over.
2.) Material input costs are rising for just about everything, fuel, chips, metals, components, and labor. You name it it costs more.
3.) You may not have heard but there are some very major supply issues. Even very large, very well capitalized, companies are having problem moving widgets. The old warehouse operation that was using low skilled often barely above min wage labor to load stuff for shipping can’t seem to find workers that want to make McD’s money in warehouse with draconian performance quota’s. When the trailer is loaded now you have to find a driver. Good luck on that one.
4.) All of these problems are structural and even if Obama 3.0 wasn’t running the country into the dirt could not be fixed in the next 6-12 months.
Sssoooo
The long and short is earnings for everyone will be as squeezed as your budget as you try to buy heat and fuel this coming winter. Earnings across the board will be pressured and comparisons could get ugly.
Company’s will start finessing the analysts to lower their estimates so they don’t ‘miss earnings estimates. Some may hope for a quick turnaround but if the price of stock is the estimate for future earnings and future earnings are down the expectation of future stock price has real potential to find gravity.
What is holding the market up is free fed money. The government knows it, the fed knows it, and corp America knows it. This works until the fed raises rates. The whole operation is only trying to keep government borrowing costs low because if the government has to pay more for the Trillions they borrow and spend its all over for all of us.
But until then the market is hitting very heavy turbulence. The big smart money will attempt to bail out in front of the everyday American. Oh that would be you and I.
Not personal investment advice.
But I would take a good hard look at any borrowed money if rates rise paying revolving credit could become a back breaker.
Look at where your money is invested. Know, both the potential risk and the potential reward and keeping things in balance is a good idea.
Pretty much everything will cost more including the cost of government. This means you Will Have Less Money, plan accordingly.
The stock market is as much of a belief system as our collective acceptance of FRN as a medium of exchange.
The investment system sells the future price of a company based on future expected earnings or value if bought by another company.
Todays earnings are being compared to earnings of both the previous year and previous quarter.
Company’s are being attacked on multiple fronts.
1.) The easy comparison against Covid numbers are fading into the comparison history. In my estimation the ‘easy’ beat against Covid sales and earnings have juiced the comparisons are over.
2.) Material input costs are rising for just about everything, fuel, chips, metals, components, and labor. You name it it costs more.
3.) You may not have heard but there are some very major supply issues. Even very large, very well capitalized, companies are having problem moving widgets. The old warehouse operation that was using low skilled often barely above min wage labor to load stuff for shipping can’t seem to find workers that want to make McD’s money in warehouse with draconian performance quota’s. When the trailer is loaded now you have to find a driver. Good luck on that one.
4.) All of these problems are structural and even if Obama 3.0 wasn’t running the country into the dirt could not be fixed in the next 6-12 months.
Sssoooo
The long and short is earnings for everyone will be as squeezed as your budget as you try to buy heat and fuel this coming winter. Earnings across the board will be pressured and comparisons could get ugly.
Company’s will start finessing the analysts to lower their estimates so they don’t ‘miss earnings estimates. Some may hope for a quick turnaround but if the price of stock is the estimate for future earnings and future earnings are down the expectation of future stock price has real potential to find gravity.
What is holding the market up is free fed money. The government knows it, the fed knows it, and corp America knows it. This works until the fed raises rates. The whole operation is only trying to keep government borrowing costs low because if the government has to pay more for the Trillions they borrow and spend its all over for all of us.
But until then the market is hitting very heavy turbulence. The big smart money will attempt to bail out in front of the everyday American. Oh that would be you and I.
Not personal investment advice.
But I would take a good hard look at any borrowed money if rates rise paying revolving credit could become a back breaker.
Look at where your money is invested. Know, both the potential risk and the potential reward and keeping things in balance is a good idea.
Pretty much everything will cost more including the cost of government. This means you Will Have Less Money, plan accordingly.