Looking Out To August As July Melts: All Hell Will Likely Break Loose Next Week Going Into Earnings Season
All hell will likely break loose next week going into earnings season.
Major wailing and gnashing of teeth – expecting the biggest drop of the year.
Will post more when it looks like a sure thing.
Wall Street Is Pretty Sure That Earnings Season Will Be Crappy
“21 May quarter end companies reported 2Q results, 62% beat consensus EPS w/ a 1.7% surprise in aggregate,” wrote Deutsche Bank’s David Bianco in a note to clients this week. “The surprise was slightly below the last few quarters. Aggregate y/y EPS growth was 7.9% and 5.8% for revenue; this would be healthy S&P growth, but early reporters normally exceed the S&P.”
Teetering On The Brink AGAIN: World Faces ‘Perfect Storm’ With Eurozone Crisis, Crappy Earnings Season, And China’s Cash Crunch
Bracing for an Ugly Earnings Season
The slowdowns in Europe and China are hurting corporate profits
Forget QE Shenanigans: ‘Good Is Good and Bad Is Bad’
John Williams – We Are Beginning To Approach The End Game
With tremendous volatility continuing in global markets this summer, John Williams, of Shadowstats, released an incredibly important report which contained an ominous warning. Below is a key portion of this tremendous report, and King World News wanted to pass it along to our global readers:
Here is the ominous warning from John Williams of Shadowstats:
Beginning to Approach the End Game. “Nothing is normal: not the economy, not the financial system, not the financial markets and not the political system. The financial system still remains in the throes and aftershocks of the 2008 panic and near-systemic collapse, and from the ongoing responses to same by the Federal Reserve and federal government. Further panic is possible and hyperinflation remains inevitable.
The Economy Is Quickly Headed South – QE 4 To Follow
Sure baby, mañana. It was always mañana. For the next few weeks that was all I heard––mañana a lovely word and one that probably means heaven. – Sal Paradise, main voice in Jack Kerouac’s “On The Road”
That famous line from “On The Road” came to mind after I read a summary of the Fed’s Bill Dudley’s speech today in which he admitted that the Fed is often “too optimistic” in its economic forecasts but that he himself saw a stronger economy in 2014: “Tomorrow and tomorrow and tomorrow…It’s a tale told by an idiot, full of sound and fury, signifying nothing” (Macbeth).
The FTSE 100 fell in early trading, following global markets, in a sell-off triggered by a slowdown in China’s services sector and worries that Egypt’s crisis will push up oil prices.
Barclays, Credit Suisse, Deutsche Bank Ratings Cut by S&P
“We consider that these banks’ debtholders face heightened credit risk owing to the industry’s tighter regulation, fragile global markets, stagnant European economies and rising litigation risk stemming from the financial crisis,” S&P said.
Mortgage Apps Plunge At Fastest Rate In Over 3 Years
We were promised by the cognoscenti of PhD economists that higher mortgage rates would not affect the so-called housing recovery. This collapse year-over-year in mortgage apps is as bad as that in 2006 when the last bubble burst…
Euro-Area Services Output Contracts More Than Estimated in June
Euro-area services contracted at a faster pace than initially estimated in June, as the 17-nation currency bloc struggled to emerge from a record-long recession. Slowing means recession. Contraction means depression.
Eurozone unemployment at record high in May
Across the eurozone, there were 19.22 million people unemployed, 67,000 higher than the previous month — a closer look at the figures show that Italy was largely behind the increase.
Things In Portugal Are Getting Worse
Despite media rumors that the Portuguese foreign minister Portas, who resigned on Tuesday precipitating a complete collapse in Portugual bond prices and ushering in the latest European political crisis, has agreed to stay in the government as a Deputy PM and economy minister (nothing like some title inflation-pro-quo), things in Portugal are rapidly turning from bad to worse. To wit:
- PORTUGUESE 10-YEAR BONDS DECLINE; YIELD RISES 14 BPS TO 7.60%
- PORTUGUESE TWO-YEAR NOTE YIELD RISES 60 BPS TO 5.64%
- PORTUGUESE 2-YEAR YIELD REACHES 5.66%, HIGHEST SINCE NOV. 20
The main reason for the collapse appears to be the near consensus developing this morning that no matter what the government does at this point, a second bailout of the small country is inevitable.
Take what UBS economist Gyorgy Kovacs and strategist Justin Knight wrote in a client note:
- Political crisis makes Portugal’s exit from EU78b Troika program in 2014 and subsequent return to bond markets unlikely write
- A second bailout may be necessary if Troika program delayed
- Austerity fatigue in population with country in third year of recession and unemployment above 18%
- Continued political instability may require primary market purchases by ESM of Portuguese debt in 2014
- ECB would avoid OMT as beneficiary country must be able to access open market, likely only after several bond issues