Big Sensationalist Heading!!

I’ve noticed that the readership of this piece is higher when I post a “Big Sensationalist Heading!!” and given I couldn't really think of one today, I thought I'd give this a shot. Trouble is, I can only crack this gag once.

The earnings season is nearly over in the US. Whether you believe the numbers are not…here are the facts: 449 companies in the S&P have reported. 301 of which have beaten expectations. 116 of those have beaten by 0-10%, 73 by 10-20% and 31 by 20-30%. So earnings have been better for sure. The market however has not paid much attention to them. They have been, I feel, an accommodating adjunct to the better economic data, stress test shenanigans and MSM cheerleading that have conspired make near extinct all that is ursine. The previously ubiquitous Market Bear has been subject to a gross culling. Should this morning’s move continue however, we may see a remarkable resurgence in the Bear population.

I mentioned previously that I thought the Stress Tests would provide the market with direction, one way or the other. This hasn’t really borne out. The market, while it didn’t/couldn’t have (surely?) bought the results of the tests, it did seem to suspend disbelief for a while and had a stab at a rally. While equities are small off today, we’re seeing a reasonable rally in bonds and a sell off in the risk currencies and commodity spectrum. The $ took a post payroll pasting on Friday but has regained some ground today thanks to its safe haven status. I continue to think the market should be lower, and having respected the rally, it is now time for a pullback/reality check. Have we gone from hoping for a recovery to now expecting one? I think that could well be the case and if so, these expectations will need to be moderated. So, while the stress tests may have failed to provide direction, the lack of “event” on the horizon, I think will enable people to be more comfortable with the idea of putting on some new shorts.

Oh and look, another 5 stocks offerings today…anyone for some expensive stock??