What will trigger the stock crash?

Tuesday, 19 April 2022

Other than faltering macro, the other big one is earnings. In particular, the forward estimates of coked-up kids on Wall Street. Morgan Stanley has more.

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We make the case that earnings revisions will decelerate amid 1Q reporting season as the MS Business Conditions Index (a survey of our industry analysts) just fell further and margin headwinds mount / are not fully reflected in consensus estimates. Stocks should discount this risk via the ERP channel.

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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.