3Q13 Earnings Scorecard: Macro Monopolization

Macro's Monopolization:  The EPS-Sales Beat-Miss spread continues to widen vs 2Q13 and the TTM average while macro, more than fundamentals, has persisted as the dominate driver of beta during earnings season.  Forecasting fundamentals has been something of an antediluvian exercise thus far with only 60% of companies that have beaten estimates subsequently outperforming the market.   


Beat-Miss:  Beat-Miss trends remained largely static over the last week as 53% and 75% of SPX constituent companies have beaten Sales and Earnings estimates, respectively.  With three-quarters of companies having reported, the Sales-EPS beat-miss spread continues to widen vs the 2Q13 (54%/71%) and TTM (51%/72%) averages. 


3Q13 Earnings Scorecard:  Macro Monopolization - ES Table 110113


Style Factor Performance:   Reported results vs expectations across style factors has flattened out in the latest week with the exception of high topline growers, where high growth equities continue to perform better vs existent estimates that their slow growth counterparts. 


3Q13 Earnings Scorecard:  Macro Monopolization - ES SFP Table 110113


Fundamental Performance:    Slight deterioration WoW with 51% and 53% of companies registering sequential acceleration in sales growth and earnings growth, respectively.  55% of companies are reporting sequential expansion in operating margins as cost initiatives, modest efficiency gains and muted wage pressures continue to drive peak returns to capital.  At the sector level, Materials, Tech, Industrials and Staples are reflecting improving trends across sales, profitability and margins.


3Q13 Earnings Scorecard:  Macro Monopolization - ES OP Table 110113 


The Post-Print Random Walk?  Below we chart company Beats & Misses vs subsequent market adjusted 3-day performance.

  • Sales: 60% of companies that beat sales estimates subsequently outperformed the market to the tune of 4.0% on average.  The other 40% of companies that beat sales estimates underperformed the market over the subsequent 3-day period by an average of -3.7%.  Subsequent performance for companies missing Sales estimates was similarly mixed.  
  • EPS:  57% of companies beating EPS estimates have subsequently outperformed the market by ~3.8% on average while 43% went on to underperform the market by an average of -3.9%. Subsequent performance for companies missing EPS estimates was similarly mixed.  

3Q13 Earnings Scorecard:  Macro Monopolization - BM Sales


3Q13 Earnings Scorecard:  Macro Monopolization - BM EPS


Christian B. Drake


People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more

Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more