EARNINGS ARE EXCEEDING DUMBED DOWN EXPECTATIONS

According to Bloomberg 78% of 303 S & P 500 companies that have reported earnings have exceeded expectations.  Regarding revenues, 39% beat forecasts and 40% matched.  For the quarter earnings are expected to decline by 2.1% YOY, an improvement over the 3.8% expected drop.  Currently analysts are expecting a 1.1% 4Q profit increase.

At this juncture, trade may become less of an issue but this opinion can radically change in a five word tweet.  Will the election become more of a focus?  Most will acknowledge the Democratic primary is nothing other than a progressive love fest.  I rhetorically ask how the eventual nominee will pivot back to the center.  Perhaps the appropriate question to ask is will there be a pivot back to the center?

I do not think the country is as far left as the Democratic candidates are suggesting.  I agree with many that if all but one of the leading Democratic candidates become President, market volatility will sharply increase.

What will happen today?

Last night the foreign markets were up.  London was up 0.35%, Paris up 0.33% and Frankfurt up 0.13%.  China was up 0.54%, Japan up 1.76% and Hang Sang up 0.49%.

The Dow should open nominally higher as a trade deal appears to be inching forward.  The 10-year is off 11/32 to yield 1.82%.

 

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