Big Week for Guidance - Let's be optimistic; about 20% of the S&P has reported earnings already, and more than 75% of these big ballers have beaten expectations by about 9% on average.
This beat rate is way above the historical 66% rate we've seen in the S&P since the mid-90s.
In the words of the Orange Man, this is a yuge week for earnings reporting, economic data, and the associated guidance and analysis that is married to it.
After Friday's meltdown, it makes you wonder if the market will play nice given that a lot of earnings calls are going to issue a lot of updated guidance this week.
This earnings season is interesting because it's the first time companies have issued or updated guidance in a Hawkish Fed's tightening cycle in a handful of years.
In S&P terms, you have a new generation of C-suite daddy rabbits who haven't whispered sweet nothings to investors on the bat phone during one of these calls yet in their careers.
There's a lot of really paradoxical and even moronic advice that you'll hear from the pundits and talking heads when it comes to picking stocks for this week and the next six months.
Find companies with good balance sheets, strong free cash flow, good revenue, good earnings, and great visibility in the market, they'll say, and that it can keep you safe in a down market. You don't say? No $hit, Sherlock.
If it was that easy to find a basket of these bellwether stocks, even the dumbest of us primates would be able to weather a market downturn.
It's not that easy. You can focus on the micro – a single industry, a small basket of companies, an individual stock, or one set of financial statements. However, if you're not considering the big picture, you can still end up in the gutter with the rest of us degens.
This year is going to be an absolute f*cking b*tch when it comes to the macro environment. If you like metaphors and plays on words, now is your time to shine when it comes to boa constrictors standing on your chest due to rising inflation and an adversarial Federal Reserve.
If you fail to acknowledge the effects of interest rates, consumer sentiment, a potential r-word, and rising prices for basically everyone, you've missed the metaphorical boat.