EARNINGS ARE REGARDED AS “MIXED”

Is a new theme arising?  For many years market participants have been rationalizing the valuations of profitless companies.  Was We Work the proverbial straw that broke the camel’s back?

For the first time in many years I am reading countless stories/reports asking the same question; how could some companies be so vastly overvalued given their lack of profitability?  Many also are now beginning to question the massive valuation of FAANG making similar comments as to mine; how a trillion dollar company could be regarded as a growth company?

Third quarter earnings have been regarded as “mixed.”  Earnings are expected to decline about 4% from the year earlier but forecasts for the fourth quarter have been cut to again of 1.9% from the 5.4% increase that was expected at the end of July.

Last night the foreign markets were mixed.   London was down 0.46%, Paris up 0.11% and Frankfurt down 0.15%.  China was up 0.48%,  Japan up 0.22% and Hang Sang down 0.49%.

The Dow should open mixed as several high profile companies disappointed on both earnings and profits.  The 10-year is unchanged at 1.77%.

kent
The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. The information contained herein has been compiled from sources believed to be reliable; however, there is no guarantee of its accuracy or completeness. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. The material provided in Daily Market Commentaries or on this website should be used for informational purposes only and in no way should be relied upon for financial advice. Please be sure to consult your own financial advisor when making decisions regarding your financial management. Members of FINRA and SIPC, Capitol Securities Management is a privately owned full-service retail brokerage and investment advisory firm headquartered in Richmond, Virginia. For nearly 30 years, we have been serving the needs of our investors. Today, more than 200 Capitol Securities Management investment professionals and support staff serve approximately 18,000 customer accounts from Southern Florida to the New England coast.