Below is a brief excerpt transcribed from Wednesday's edition of The Macro Show hosted by Hedgeye CEO Keith McCullough.
Let’s discuss earnings.
They continue to be underwhelming suffice to say, depending on what stock you own. Hopefully you don’t own Ford (F), Match.com (MTCH), or any other stock that isn’t down 10-11% on the open.
https://twitter.com/KeithMcCullough/status/1224870670342987776
Imagine you are long Plantronics (PLT), down -34.5% or Knowles (KN) at -14.7%.
“But nothing is going wrong out there in earnings season! No one is going to get fired. Don’t worry about that.”
Okay.
Meanwhile, Macy’s (MACY) is closing a whole bunch of stores, so those people will be gone and that’s just one example.
Unfortunately, that’s just what it is. That is what happens at the end of the economic cycle, and earnings are down as you can see on the top right of the chart.
What’s actually happening is incremental. What matters most is what happens on the margin.
So while today the "world’s greatest vaccine" is what people are ostensibly buying stocks on, that’s not what we do here.
Today, what changed on the margin from an earnings perspective, is that they are more negative on a year over year basis.
With Consumer Discretionary showing 24 out of the 63 companies reported, they have now recorded negative earnings for the 3rd quarter in a row.