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Notes to myself, possibly of interest to others.
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Tuesday, October 23, 2012

Rosenberg Daily - Big Reasons for Caution

S&P 500 revenues are set to decline on a YOY basis for the first time in over three years. Here we are, one-fifth into earnings season, and less than 40% have managed to beat their sales estimates — we have not seen a number this low since the first quarter of 2009 when U.S. GDP contracted at an epic 5.3% annual rate (and 20 percentage points below the historical average)!...With margins coming off cycle highs and all the fat already being cut out of the corporate cost structure, faltering sales can he expected to exert an outsized influence over profits in coming quarters. Be prepared for more downward revisions in the EPS outlook, which means be diversified, defensive, and dividend-driven (Vitus emphasis)...

Also have a glimpse at the article on page B1 of today‘s NYT titled Dwindling Demand; China's Slowing EconomyPuts Pressure on American Exporters. Fiscal cliff notwithstanding, the really big risk is a negative export shock about to hit the U.S. economy... did anyone notice that Q3 industrial production actually contracted, albeit fractionally, for the first time since the depths of the Great Recession over three years ago?

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