The Greatest Earnings Collapse Since 2009 is a Farce

A lot of bullshit is circulating today, with regards to this earnings season and how it’s the worst since 2009. Oh, really?

So far, about three-quarters of the S&P 500 have reported results, with profits down 3.1 percent on a share-weighted basis, data compiled by Bloomberg shows. This would be the biggest quarterly drop in earnings since the third quarter 2009, and the second straight quarter of profit declines. Earnings growth turned negative for the first time in six years in the second quarter this year.

Negative headlines makes traffic go up, mainly because humans are fucked up that way. The truth about this earnings season is that it’s ordinary.  The majority of the earnings decline is from oil and gas stocks, whose earnings numbers plunged over 50% this year over last. Fucking duh.

With 75% of earnings in, more than 72% of stocks in the S&P have beat expectations. Moreover, there is considerable earnings growth in consumer discretionary industries.

I hate all earnings seasons. I can’t recall the last one I enjoyed. Stocks always do better when the facade is placed firmly atop the ugly exterior. People are never happy and rarely pleased, which explains the heart stopping declines when a company misses expectations. No wonder why so many CEOs prefer to stay private.

Right now stocks are selling off, as predicted. SPY and  QQQ flagged overbought in Exodus yesterday. I expect this drop to be shallow. We will likely rally towards the ends of this week, then level off again. I am expecting both November and December to be flat months.