It's earnings season.
Permabulls on Wall Street are terribly fond of the narrative that "Ex-Energy" earnings look great! We understand this proclivity, Energy earnings are terrible (down -132% so far). Just look at the chart below.
Click to enlarge
But what this narrative lacks is cohesiveness. In fact, six of ten S&P 500 sectors have negative earnings growth so far, with Financials (-14.1%) and Materials (-14.8%) companies putting up double-digit earnings losses.
In other words, Energy has company.
Here's a thought... Since permabulls are more than happy to strip battered sectors out of earnings, why not (for the sake of consistency) just go ahead and strip out the performance of Energy, Financials and Materials companies from the recent market rally as well? Oh yea, because those sectors have led the pack.
Bottom Line: Stripping out sectors of the S&P 500 to fit some permabull narrative is as nonsensical, as it is wrong.
