The negative guidance is mostly management setting up for another earnings 'surprise' when they report second quarter results. The Dow closed at a record this week and the S&P 500 is just a half percent off from its high. Stronger economic growth in the second quarter should drive sales and there is little reason to expect any more than a minor correction in asset prices.
We were right on our call last week for a disappointment in the first quarter economic growth, though the weakness surprised even our dismal forecast. GDP growth in the first three months came in at just 0.1% on an annualized basis against a consensus view of 1.1% and our own forecast as low as 0.7% for the quarter.
We wrote earlier in the quarter that the build in business inventories over the last two quarters of last year could significantly hold back growth in the first quarter and that the markets were not ready for the level of potential weakness. We estimated last week that sluggish business investment in the first quarter would detract 0.6% from growth. We also highlighted weakness in trade over the quarter and warned of a hit to GDP on the order of 0.5% for the quarter. Official numbers reported Wednesday showed that weakness in business inventories detracted 0.6% and trade detracted 0.8% from GDP growth
You have an agenda because your job is to count other peoples money.
When you look at the world through rose colored glasses everything looks rosy.
The US is not too big to fail if that is the plan of TPTB.
Uh Huh Eh !