Below is a brief excerpt transcribed from Tuesday's edition of The Macro Show hosted by Hedgeye CEO Keith McCullough.
This is one of the top three reasons why you shouldn’t have bought "stahks" when there was an implied volatility discount just after Valentine’s Day.
Aggregate earnings growth for the S&P 500 are ZERO. Well 0.62% to be more precise for the bulls.
But you can see the 20.34% on the bull side of Utilities. That is our top sector holding. Utilities is the only one with the real earnings growth to be long of. If you want to be long RoC earnings growth, obviously something like real estate is fine too.
Things that have not been fine are the consumer, which everyone said was in great shape.
No, actually the consumer is in slowing shape and earnings are in very bad shape. Just look at Consumer Discretionary earnings growth which are down -7.3% year-over-year. All while you also have Industrials which remain in a recession.
What could have possibly gone wrong other than the cycle itself?
Don’t forget those earnings were pre-virus numbers. Q1 is going to be a lot worse.
Even some of the best American companies ever created would agree with that. Visa being the latest update on that after MasterCard did as well.
Just wait until the bad companies tell us what’s going on. They know, they just won’t tell you yet.
