As if our jobs were not complicated enough trying to divine bullish or bearish at this technical decision point in the markets, here comes FactSet with the numbers on earnings preannouncements thus far for Q3.
Here is a link to the entire report.
“Companies in the S&P 500 have issued fewer negative EPS preannouncements and more positive EPS preannouncements for the third quarter of 2015 relative to the past two quarters. For Q3 2015, 76 companies have issued negative EPS guidance and 32 companies have issued positive EPS guidance. If 76 is the final number for the third quarter, it will mark the lowest number of companies issuing negative EPS preannouncements for a quarter since Q2 2012 (72). If 32 is the final number of companies issuing positive EPS guidance for the third quarter, it will mark the highest number of companies issuing positive EPS guidance since Q4 2012 (34).”
We are nearing the decision point with some items (for example, the Dow) above their August lows and others (for example, the Russell 2000) below. There will be a fudge factor here to allow for volatility up and down. Also the end of Q3 will likely play a role as money managers and institutions massage the books as to what they want to show to clients in the quarterly reports.
So the next few days could be pretty volatile, but the above scores a small one for the bull case, given that stocks are down significantly from their highs (and over valuation). Business wise, the world is not ending.
Let’s be careful to weigh everything, not just what we want to weigh. Making the right ultimate decision during this time period is going to be critical to future success in the market, whether to the upside or the downside. I want to factor everything that seems relevant.