But, as the saying goes, there is nothing to fear and only fear itself. And there are definitely warning signs flaring everywhere, leading some Wall Street observers to express doubts about the current quarter and the outlook for 2022 which is less than three months away if kept score at home this weekend? In between golf rounds this weekend, the irrepressible Brian Sozzi detailed several reasons why stocks are suddenly inclined to rally, even with fears associated with stagflation, supply chain and labor shortages on high boil It may have something to do with the fact that – barring unpleasant surprises from Elon Musk -maker of Squid Game or the House – Q3 results are still mostly surprising to the upside.
According to Refinitiv, the ratio of positive earnings pre-announcements to negative ones sits currently at 0.8%. That is well below the comparable four-quarter average of 2.6, but in line with the long-term average of 0.8%.
Meanwhile, companies report earnings 15.4% above expectations — well over the long-term average of 4% and slightly less than the previous four-quarter average of 18.3%.
How does pessimism arise from earnings season? was overblown, Yahoo Finance Live Chairman Thomas Hayes said on Monday in Great Hill Capital.
If these supply chain issues were to persist, why would net profit margins be so high? Hayes asked, adding that current profit margin estimates are near macroeconomic highs, even amid historical headwinds.
Echoing JPMorgan Chase CEO Jamie Dimon, Hayes insisted that the current worries will be proven a non-issue for corporate America and could likely work itself out before next year. He estimated that in Q 3 earnings expectations will likely grow by Q 3.
On the surface, there are still plenty of reasons to be anxious. As if investors needed any reminders about COVID - 19, Disney DIS said on Monday that it was restructuring its 2022 slate of films with the Delta variant's impact on movie traffic and the comparatively weak showing of No Time to Die likely factors.
While consumers might still be much less comfortable streaming movies in person or have more comfort at home, other data indicates they re still spending on just about everything in sight.
Open wallets are contributing to what Jason Draho, UBS head asset allocation Americas, firmly insisted on the bullish case of market, which recently called a negative aggregate demand shock that keeps the positive call firmly intact.
The surge in demand for goods during the pandemic has been a big factor pushing inflation higher. This demand shock may also help the economy break out from the prior stagnation regime of secular history, Draho wrote in an analysis last week.
One explanation for this regime is that aggregate demand was too high and savings too low, keeping growth, inflation, and rates all low. A positive demand shock could generate a positive cycle of new investment and consumption that enables the economy to break out of this regime, he added.
By Javier E. David, editor at Yahoo Finance. Building permits, month-over-month, September - 2.4% expected, 5.6% in August None 8: 30 a.m. ET: Beginnings of apartments, month-over-month, September 0.3% expected, 3.9% in August None 6: 00 a.m. ET: Synchrony Financial SYF is expected to report adjusted earnings of $1.49 per share on revenue of $2.5 billion.
ET: Bank of New York Mellon BK is expected to report adjusted earnings of $1.00 per share on revenue of $3.96 billion.
ET: Fifth Third Bancorp FITB is anticipated to publish adjusted earnings of 90 cents per share on revenue of $1.99 billion.
ET: Johnson Johnson JNJ is expected to report adjusted earnings of $2.37 per share on revenue of $27.74 billion.
ET: Halliburton HAL is expected to report adjusted earnings of 28 cents per share on revenue of $3.90 billion.
ET: Procter Gamble PG is expected to report adjusted earnings of $1.59 per share on revenue of $9.89 billion.
ET: The Travelers Cos. TRV is expected to report adjusted profits of $1.94 per share on revenues of $8.61 billion.
ET: Phillip Morris International PM is expected to report adjusted earnings of $1.56 per share on revenue of $7.99 billion.
ET: Kansas City Southern KSU is expected to report adjusted earnings of $2.07 per share on revenues of $730,91 million.
ET: Netflix NFLX is expected to report adjusted earnings of $2.63 per share on revenue of $7.48 billion.
ET: United Airlines UAL is expected to report adjusted loss of $1.61 per share on revenue of $7.64 billion.
At 5: 30 p.m. no U.S. Securities and Exchange Commission chairman Gary Gensler has a telephone interview with the audience.