Posts Tagged ‘revenue’

And Again, More Black Shoots (Earnings)

And Again, More Black Shoots (Earnings)

green shoots or black shootsCourtesy of Karl Denninger at The Market Ticker


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WILL FURTHER COST CUTS LEADER TO Q2 OUTPERFORMANCE?

WILL FURTHER COST CUTS LEADER TO Q2 OUTPERFORMANCE?

cost cuttingCourtesy of The Pragmatic Capitalist

At the end of the day it’s still earnings that matter most.  As the expectation ratio has shown, the stock market has remained resilient primarily due to the fact that expectations for earnings have become very low and more corporations are outperforming the low hurdles.   But a look under the hood has shed some light on the true strength of these earnings.   We’ve seen a common trend of late.  Companies are missing top line estimates and handily beating bottom line estimates.  The two most recent examples of this phenomenon were RIMM and FedEx.  72% of the S&P 500 reported revenues that were lower than the same quarter last year.  As corporations shed workers and other costs they’re actually able to outpace their revenue declines with cost cuts.  While we’re still seeing very weak revenues figures (which is representative of the weak economic landscape) we’re actually seeing some margin stabilization and subsequently better than expected bottom line growth.  This chart from JP Morgan shows the trend at hand:

mrgins

GDP is expected to climb substantially this quarter.  We’re also seeing some stabilization in overall economic productivity.  Meanwhile, on the cost side we’re continuing to see very low levels of hiring, low labor costs, low business spending and inventories.  Revenues are down just 17% for the overall S&P 500 on a year over year basis, but as you can see in the following two charts spending and inventories have nosedived:

costs

As JP Morgan notes, there is no evidence that this is sustainable or positive for the markets in the long-term though:

Corporate defense of profits and financial standing, that is continuing in the current quarter, is apparently being rewarded in the credit markets. Corporate spreads over Treasuries and corporate bond yields have continued to decline in the past several weeks even as other longer-term market interest rates were rising.
The implications of corporate financial performance for economic growth over the coming year is uncertain. Business will emerge from recession in better financial health than compared to exits from past recessions, and with internal funds running well above capital spending. These conditions might argue for a relatively robust corporate expansion.

But for this to happen, the extreme caution that produced these financial results has to change. And there is no


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California 50 Days From Financial Meltdown

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California 50 Days From Financial Meltdown

Courtesy of Mish

California State Controller John Chiang says California 50 Days From Financial Meltdown.

State Controller John Chiang today released his monthly report detailing California’s cash balance, receipts and disbursements in May and through the first 11 months of the fiscal year. In May, revenue was $827 million below the latest projections found in the Governor’s May Budget Revision.

"Without immediate solutions from the Governor and Legislature, we are less than 50 days away from a meltdown of State government.

This presents a terrible threat to California’s economy and to the State’s delivery of basic public services,” said Chiang. “A truly balanced budget is the only responsible way out of the worst cash crisis since the Great depression.”

Personal income taxes were $475 million below (-23.0%) estimates in the May Revision. Corporate taxes were down $84.4 million (-25.8%), and sales taxes fell by $109 million (-3.3%).

Statement of General Fund Cash Receipts and Disbursements

Inquiring minds are reading the Statement of General Fund Cash Receipts and Disbursements State Finances in May 2009.

The State’s revenues continued to deteriorate in May. Total General Fund revenues were down $827 million (-13.5%) from estimates in the Governor’s proposed 2009-10 May Budget Revision.

Personal income taxes were $475 million below the May Revision estimate (-23.0%), corporate taxes were down $84.4 million (-25.8%), and sales taxes lagged by $109
million (-3.3%).

Compared to the 2009-10 Budget, General Fund revenue in May was $1.75 billion below (-24.8%) the estimate for the month. Corporate taxes came in $1.16 billion lower (-82.6%) than estimated, and sales and use taxes lagged by $300 million (-8.7%). Personal income taxes fell short by $218 million (-12.1%).

Compared to May 2008, General Fund revenue in May 2009 was down $1.14 billion (-17.7%). The total for the three largest taxes was below 2008 levels by $1.2 billion (-19.5%). Sales taxes were $259 million lower (-7.6%) than last May, and personal income taxes were down $1.03 billion (-39.3%). Corporate taxes were $83
million above (52.1%) May 2008.

California Receipts

The Grim news goes on and on.

Democrats Propose Using Reserves To Balance Budgets

California


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Zero Hedge

Hedge Funds Have Never Been More Concentrated Into The Same Handful Of Stocks

Courtesy of ZeroHedge View original post here.


Sun, 05/24/2020 - 15:25

Six years ago, back in 2013, we presented what we then viewed (and still view) as the best trading strategy of the New Abnormal period, when we said that buying the most shorted names while shorting the names that have the highest hedge fund concentration and institutional ownership is the surest way to generate alpha, to wit:

... in a world in which nothing ...



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Phil's Favorites

A doctor shares 7 steps he'll review to decide when and where it's safe to go out and about

 

A doctor shares 7 steps he'll review to decide when and where it's safe to go out and about

The Inn at Little Washington in Washington, Virginia, shown May 20, 2020, plans to use mannequins in its dining room to enforce social distancing when it reopens at the end of the month. Olivier Douliery/AFP via Getty Images

Courtesy of William Petri, University of Virginia

As we return to some degree of normalcy after weeks of social distancing, we all need a plan. As an immunologist, I’ve given this a lot of ...



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Biotech/COVID-19

A doctor shares 7 steps he'll review to decide when and where it's safe to go out and about

 

A doctor shares 7 steps he'll review to decide when and where it's safe to go out and about

The Inn at Little Washington in Washington, Virginia, shown May 20, 2020, plans to use mannequins in its dining room to enforce social distancing when it reopens at the end of the month. Olivier Douliery/AFP via Getty Images

Courtesy of William Petri, University of Virginia

As we return to some degree of normalcy after weeks of social distancing, we all need a plan. As an immunologist, I’ve given this a lot of ...



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Chart School

Is this your local response to COVID 19

Courtesy of Read the Ticker

This is off topic, but a bit of fun!


This is the standard reaction from the control freaks.








This is the song for post lock down!







What should be made mandatory? Vaccines, hell NO! This should be mandatory: Every one taking their tops off in the sun, they do in Africa!

Guess which family gets more Vitamin D and eats less sugary carbs, TV Show



...



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ValueWalk

Hazelton Capital Partners 1Q20 Commentary: Long Renewable Energy Group

By Jacob Wolinsky. Originally published at ValueWalk.

Hazelton Capital Partners commentary for the first quarter ended April 30, 2020, discussing their current portfolio holdings Renewable Energy Group, Apple and Berkshire Hathaway.

Q1 2020 hedge fund letters, conferences and more

Dear Partner,

Hazelton Capital Partners, LLC (the “Fund”) returned -23.8% from January 1, 2020 through March 31, 2020. By comparison, the S&P 500 returned -19.4% during the same quarter.

Before reviewing the 1st quarter of 2020 and Hazelton Capital Partners’ portfolio, my sincere hope is that everyone, their family, friends, a...



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The Technical Traders

Gold Stocks Are Overbought. You Don't Want Prices to Go Straight Up

Courtesy of Technical Traders

Bill Powers of MiningStockEducation.com talks with a professional trader and market commentator Chris Vermeulen says gold stocks are overbought and need a breather which would be good for the overall upward trend.

Chris shares how he has and is trading the junior gold sector. He called the recent February 24th top in the gold stocks before the March crash. And now he is warning to a top in some gold-stock positions during an expected pullback.

Chris also addresses whether a lot of the gap-up’s in many gold...



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Kimble Charting Solutions

Doc Copper Counter-Trend Rally Could Peak Here, Says Joe Friday

Courtesy of Chris Kimble

Could ole Doc Copper be sending an important message about the overall health of the global economy and the stock market in the next couple of weeks? It appears it could!

This chart looks at Copper futures on a weekly basis over the past 7-years. Doc Copper looks to have double topped in late 2017 and early 2018. After the double top, Copper has continued to create a series of lower highs, which sends a bearish divergence message to stocks.

Numerous highs and lows have taken place along the line (1) over the past 5-years. The rally off the March lows ...



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Digital Currencies

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

 

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

App-etising? LDprod

Courtesy of Michael Rogerson, University of Bath and Glenn Parry, University of Surrey

Food supply chains were vulnerable long before the coronavirus pandemic. Recent scandals have ranged from modern slavery ...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

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Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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