- Hostage to Headlines
- Facebook Analyst Reports All Over the Map
- More Fallout From the Facebook Fiasco
- Facebook and Morgan Stanley's 99 Problems
- Lousy Economic Numbers, but Stocks Hold Up
- Eurobond Talk: Good News and Bad News
- Hopes Fading for Big Announcement From EU Leaders
- European 'Crisis Tennis' Again
- Facebook IPO 'Conspiracy' Theories Abound
- OK, Facebook Is Embarrassing
TRADER TALK RSS FEED
MOST SHARED
- Europe May Be Unprepared for Greece Exit: Official
- Marc Faber: 100% Chance of Global Recession
- How Boaz Weinstein and Hedge Funds Outsmarted JPMorgan
- As Bank Loans Dry Up in Spain, Small and Medium Businesses Fight for Life
- Facebook Analyst Reports All Over the Map
- How Nasdaq Lost Control of Facebook IPO, by the Minute
- Where Large Banks Fail, Regionals are Succeeding: Bove
- Spain's Bankia Eyes Stake Sales After Record Bailout
- A New Look at the ‘New Poor’
- Six Pack: Beer Buzz of the Week
- Greek Exit Could Trigger 50% Fall in Euro Stocks: Analyst
- Under Pressure, FHA Skews to Wealthier Home Buyers
- Big Stock Upside for Hudson City Deal: Analyst
- 5 High-Yield Stocks Ready to Boost Dividends
- Yoshikami: Four Things You Need to Know About Gold Now
- Steinbock: The Euro Zone Endgame Begins
- Option Bulls Take Another Shot on Idenix
- How Weinstein, Hedge Funds Outsmarted JPMorgan
- How Nasdaq Lost Control of Facebook IPO, by the Minute
- Week Ahead: Europe Has Wall Street Bull on Short Leash
- Economists Can't Solve Europe's Crisis
- Citigroup Lost $20 Million on Facebook IPO Trades
- JPMorgan to Shake Up Risk Team After Big Loss: Report
- RIM May Cut at Least 2,000 Jobs in Restructuring: Report
- EU Finalizes Bank Reforms; Shifts Burden to Bondholders
- Spain's Bankia Eyes Stake Sales After Record Bailout
More Videos
Trader Talk
Text Size 
The Next Big Worry
The Dow is down about 4.8 percent this week, the worst showing since November.
The jobs report was bad, but not the worst case scenario that some were expecting. Two stocks declined for every one advancing, but volume was again on the light side.
In fact, volume has been light since before Christmas. The good news is that the decline this week was due to a lack of buyers, not any panicky sellers.
The bad news is that there is still little enthusiasm to buy stocks.
Alcoa [AA
Loading...
()
] kicks off fourth quarter earnings on Monday.
The big worry right now is earnings revisions. Downward earnings revisions are continuing, and are particularly strong in retailers, energy and materials. It is also picking up for the first quarter. Why does this matter? Because stock performance is fairly closely correlated with earnings revisions.
Another problem is analyst downgrades: according to Deutsche Bank, this is the worst on record, both in terms of the breadth of the downgrades (the number of stocks that are or have been downgraded) and the depth (the number of stocks that are rated at "reduce" or "sell").
Why does this matter? Because a notable turn in sentiment--stocks being upgraded--is often used as signs of a durable bottom (stocks often put in an absolute bottom before this).
As for 2009 earnings, it goes like this: there is a second half recovery expected. In particular, there is an expectation that earnings in financials and consumer discretionary stocks will stage a recovery.
This, as you might guess, is a pretty tall order given the economy.
Earnings are expected to DROP for materials and energy stocks, and here there might be a bit of an upside if we get some kind of bottom in the global economy.
Bottom line: stocks may or may not have bottomed, but to get a notable rise off the bottom, we will need more positive earnings sentiment than we are currently getting. Absent that, we will have failed rallies and will, at best, be condemned to moving sideways for a good part of the year.
_____________________________
_____________________________
_______________________________________
Questions? Comments?
- The Nasdaq has suffered the most from the EU crisis showing there's risk in the usual tech stocks.
- Targeting more Millennials is just one of the items brewing for consumers in the world of spirits.
- It seems many people may need a reminder of how NOT to act on a plane. Here are a few tips.
- Here are some very unusual roadside stops along American highways that might peek your interest.
- How three generations of Americans are dealing with the finances of retirement.
- Hostage to Headlines
- Facebook Analyst Reports All Over the Map
- More Fallout From the Facebook Fiasco
- Facebook and Morgan Stanley's 99 Problems
- Lousy Economic Numbers, but Stocks Hold Up
- Eurobond Talk: Good News and Bad News
- Hopes Fading for Big Announcement From EU Leaders
- European 'Crisis Tennis' Again
- Facebook IPO 'Conspiracy' Theories Abound
- OK, Facebook Is Embarrassing
Data is a real-time snapshot *Data is delayed at least 15 minutes
