Stocks crash to get a lot worse yet

Sunday 13 February 2022

Amusing stuff today from the smartest guys in the room this week. Permabullish Goldman has turned bearish in its own way:

Stronger-than-expected 4Q earnings results have helped the S&P 500 find its footing in the last two weeks.S&P 500 EPS grew by 26% year/year in 4Q 2021,6 pp above the 20%rate that consensus anticipated at the start of earnings season.

Despite strong backward-looking 4Q results, signals for the 2022 earnings outlook have been mixed.151 companies provided FY1 guidance and 52% guided below consensus. During reporting season, 2022 bottom-up consensus EPSestimates were largely unchanged for the aggregate S&P 500 (+0.5%). While sales forecasts rose by 0.5% for the typical firm, net margin estimates were unchanged.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.