Financial Times Projection for 07 - Mercedes-Benz Forum

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post #1 of 15 (permalink) Old 02-11-2007, 08:46 PM Thread Starter
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Financial Times Projection for 07

From the Monday Editon of the Financial Times

The percentage of US companies failing to meet Wall Street's earnings expectations has reached the highest level in more than two years, fuelling fears that corporate America's record run of profit growth will come to an abrupt end.

Concerns of a slowdown in corporate profitability – one of the key reasons for the stock market's record-breaking streak – have been heightened by companies' increasingly bearish outlook on business prospects.

More than 22 per cent of the 400-plus S&P 500 companies to have reported results for the fourth quarter of 2006 failed to meet Wall Street expectations. This is the highest level of "misses" since the third quarter of 2004, according to Reuters Estimates.

The spike in earnings disappointments increases the chances that corporate America will end a three-and-a-half year run of quarterly double-digit profit growth in the last quarter of 2006 rather than at the beginning of 2007, as widely expected.

Missing earnings forecasts is particularly embarrassing for US companies because, unlike most of their European counterparts, many set their own yardsticks by providing analysts with quarterly earnings guidance.

"The period of rapid earning growth is at an end," said Ashwani Kaul, senior research analyst at Reuters Estimates. "Companies have reached levels of high absolute earnings and cannot be expected to continue at this pace. We are entering a low earnings growth environment."

The large number of companies missing Wall Street estimates – including carmaker Ford Motor, bond insurer MBIA and chip manufacturer Advanced Micro Devices – has prompted analysts to pare back forecasts. The consensus is that the S&P 500 will fall short of double-digit earnings growth in the fourth quarter of 2006. Slowing corporate profitability could compound the negative sentiment towards the US stock market, which last week had its biggest weekly fall since December amid fears over inflation, oil prices and rising mortgage defaults.

Analysts forecast a rise of about 5 per cent in earnings of S&P 500 companies in the first quarter of 2007, down from more than 7 per cent two months ago, according to Thomson Financial.

"We are going through a big transition in mindset," said Mike Thompson, director of research at Thomson Financial. "We are finally seeing a slowdown in earnings."

Copyright The Financial Times Ltd. All rights reserved.

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post #2 of 15 (permalink) Old 02-11-2007, 08:49 PM
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Tell that to Bot. Him and his cheerleaders still back slapping each other. I am going to sit and wait. The day the bottom falls out, I am going to send him a big "I told you so".

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post #3 of 15 (permalink) Old 02-11-2007, 08:58 PM
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Whoa despair and agony on me.
The I hate America crowd has been beating this drum the past 4 years
you are bound to be right some time, kinda like $100 barrel oil.
One of these years!
post #4 of 15 (permalink) Old 02-11-2007, 09:38 PM Thread Starter
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Originally Posted by guage
Whoa despair and agony on me.
The I hate America crowd has been beating this drum the past 4 years
you are bound to be right some time, kinda like $100 barrel oil.
One of these years!
This was not posted with any comment, just FYI. You interpreted it as part of the I Hate America crowd, which I am not. Nor is any of the group you try to put in there.

You fail to realize much of the "prosperity" of the past six years was paid for on CREDIT with both the $9TRILLION Debt and the 60 month RECORD Trade Deficit. If you are in your 30’s you will be paying for Bush’s great economy for the next 30 years in your taxes. You already are. But then again, you get your ECONOMICS education from Rush and Fox and the White House.

Corporate America has been on a very good run with profits fueled by a WEAK DOLLAR, OffShored Labor, Developing markets. What has not been touted by Bush, or looked at by folks like you who don’t like to see the ENTIRE picture is: 1) most bankruptcies in History, highest foreclosures in History, more LAYOFFS than NEW JOBS in past six years according to DoL.

When the Dollar is as weak as it is now, against foreign currencies, that works well for some big Corps but BLOWS for the country. China owns 13.4% of US DEBT.

Now, I have been saying the same thing for the past few years. The numbers have only gotten worse over those years. The economic fundamentals have not changed. Just like your household, a country cannot have more debt than income, or the opportunity of income growth.

Do you ever ask how, with all the Economic Growth that Bush has touted that he has still [with a conservative Republican Congress] run up an ADDITIONAL $4.5TRILLION DEBT in just SIX years??? The War on Terror – and Iraq are now at $1Trillion – and that is already IN budget, not OVER budget.

Do you remember the phrase from Bush1 Administration? Voodoo Economics.

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Last edited by mcbear; 02-11-2007 at 09:40 PM.
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post #5 of 15 (permalink) Old 02-11-2007, 09:39 PM
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Eventually the US economy will be bad and liberals will be overjoyed. Until then, they will have to deal with it. The LA Times won't even report unemployment stats because they are so good.

They stick to the neo-lib "first-time jobless claims" number.

Hilarious.

I am confident that the thieves will raise taxes and fuck up the economy sooner than later.
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post #6 of 15 (permalink) Old 02-11-2007, 09:44 PM Thread Starter
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Originally Posted by DaveN007
Eventually the US economy will be bad and liberals will be overjoyed. Until then, they will have to deal with it. The LA Times won't even report unemployment stats because they are so good.

They stick to the neo-lib "first-time jobless claims" number.

Hilarious.

I am confident that the thieves will raise taxes and fuck up the economy sooner than later.
The "First Time Jobless Claims" number is the DoL indicator of choice and the one used by the Administration.

And by the way, neo-lib [New Liberal]??? Most of the Liberals have been so since day one, unless you are talking about all the 'sticker scrapers' that have abandoned Bush. Might want to get your terms right.


Nice try, please play again.

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post #7 of 15 (permalink) Old 02-11-2007, 09:48 PM
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More McKownitall Econ 101 spew how this country is bad and it's all Bush's fault in just 6 years.
Bush made them take that loan ya know, Bush told them to keep up with the Jones.
Yea right.
Damn glad I didn't pull my money out of the market. LOL

Last edited by guage; 02-11-2007 at 10:00 PM.
post #8 of 15 (permalink) Old 02-11-2007, 10:17 PM Thread Starter
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Originally Posted by guage
More McKownitall Econ 101 spew how this country is bad and it's all Bush's fault in just 6 years.
Bush made them take that loan ya know, Bush told them to keep up with the Jones.
Yea right.
Damn glad I didn't pull my money out of the market. LOL
I never said this country is bad. I happen to think it is very good. It's Economics are have several very weak spots [see Financial Times artical]. And about those who "Bush made them take that loan..." You don't have an Fn clue. The concept of bankruptcies and foreclosures and backlogs is that they are a National Indicator of Economic health. Unlike the Dow30 [just an index], Bankruptcies and Foreclosures have a direct impact on the nations financial health by damaging bank’s bottom line, raising mortgage rates, raising points, affecting ARMs, tightening credit [which slows further growth] and THEN affecting the Dow30. Now do you understand why they matter.

While I don’t “knowitall”, I do know economics. And, I never said to pull all your money out of the market, I said “be careful as October is stupid time for the market” I always pull my money out then but put it in again, in safe stocks that don’t often react to fluxuations.

And whether you believe me or not is totally inconsequential to me. Financial Times, on the other hand is someone you should pay attention to. They count.

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post #9 of 15 (permalink) Old 02-13-2007, 12:14 PM
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Originally Posted by mcbear
From the Monday Editon of the Financial Times

The percentage of US companies failing to meet Wall Street's earnings expectations has reached the highest level in more than two years, fuelling fears that corporate America's record run of profit growth will come to an abrupt end.

Concerns of a slowdown in corporate profitability – one of the key reasons for the stock market's record-breaking streak – have been heightened by companies' increasingly bearish outlook on business prospects.

More than 22 per cent of the 400-plus S&P 500 companies to have reported results for the fourth quarter of 2006 failed to meet Wall Street expectations. This is the highest level of "misses" since the third quarter of 2004, according to Reuters Estimates.

The spike in earnings disappointments increases the chances that corporate America will end a three-and-a-half year run of quarterly double-digit profit growth in the last quarter of 2006 rather than at the beginning of 2007, as widely expected.

Missing earnings forecasts is particularly embarrassing for US companies because, unlike most of their European counterparts, many set their own yardsticks by providing analysts with quarterly earnings guidance.

"The period of rapid earning growth is at an end," said Ashwani Kaul, senior research analyst at Reuters Estimates. "Companies have reached levels of high absolute earnings and cannot be expected to continue at this pace. We are entering a low earnings growth environment."

The large number of companies missing Wall Street estimates – including carmaker Ford Motor, bond insurer MBIA and chip manufacturer Advanced Micro Devices – has prompted analysts to pare back forecasts. The consensus is that the S&P 500 will fall short of double-digit earnings growth in the fourth quarter of 2006. Slowing corporate profitability could compound the negative sentiment towards the US stock market, which last week had its biggest weekly fall since December amid fears over inflation, oil prices and rising mortgage defaults.

Analysts forecast a rise of about 5 per cent in earnings of S&P 500 companies in the first quarter of 2007, down from more than 7 per cent two months ago, according to Thomson Financial.

"We are going through a big transition in mindset," said Mike Thompson, director of research at Thomson Financial. "We are finally seeing a slowdown in earnings."

Copyright The Financial Times Ltd. All rights reserved.
20% missed but 70% exceeded estimates in Q4. Equity markets here and abroad don't appear too concerned... They are all up sharply today! I think we need a 2% correction or we could have a melt-down in this overheated market. A correction in the 1st half could propel the markets to new highs for some time to come. The earnings estimators some times get caught up in the euphoria and over-estimate, and I think that is partly responsible for the so-called "under-performance" we are seeing. I am moving to a somewhat more defensive posture this month, but that has more to do w/ my age than market worries.

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post #10 of 15 (permalink) Old 02-13-2007, 12:16 PM
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Quote:
Originally Posted by elau
Tell that to Bot. Him and his cheerleaders still back slapping each other. I am going to sit and wait. The day the bottom falls out, I am going to send him a big "I told you so".
You should hold your breath until then...

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