Thread by @LanceRoberts

Q3-2019 EARINGS - The Good, Bad, & Ugly.
With the bulk of earnings in we can analyze just how "good" those earnings actually were, and what we should expect next. Also, what #profits are telling us. $SPY $TLT #Earnings #Profits #Recession #Reversion
realinvestmentadvice.com/fundamentally-…

Earnings - The Good:
"With 73% of companies beating estimates, it certainly suggests that companies in the S&P 500 are firing on all cylinders, which should support higher asset prices."

However, as they say, the “Devil is in the details.”

Earnings - The Bad
"In order for companies to achieve the 73% 'beat rate' - estimates had to be crushed to accommodate lower earnings."
realinvestmentadvice.com/fundamentally-…

Since September of 2018 - both operating and reported earnings are lower by 3.21% and 5.58% respectively while the S&P 500 is up 7.8%.
realinvestmentadvice.com/fundamentally-…

As noted previously, had it not been for massive #share #repurchases, the #reported and #operating #EPS would be substantially worse. Those #buybacks are now beginning to decline which will drag on 2020 EPS growth.
realinvestmentadvice.com/fundamentally-…

Accounting Magic
The effect of share repurchases on #reported #earnings is not a small thing.
realinvestmentadvice.com/fundamentally-…

#Estimates for 2020 have already declined by more than $11/share since April 2019, while the index is up 20%+ for the year. Estimates are still too high and will decline further going into next year.
realinvestmentadvice.com/fundamentally-…

The cumulative change in the S&P 500 #index and #corporate #profits suggests that investors are paying way too much for what they are getting. Historically, outcomes have been poor. $SPY $TLT
realinvestmentadvice.com/fundamentally-…