Good Morning,

The season of data releases spins up to a much higher speed this week as over 200 companies will report in each of the next three weeks, with 73 S&P companies hitting the headlines this week alone.

Even as the pace quickens, the increases are steadily improving as well – just as suspected in your previous notes.  Expected year over year increases in both revenues and earnings continue their steady expansion.  Having already picked up more than two full percentage points in the boxed data below since earnings began last week, we suspect more is ahead

 

The green bars designate the earnings increases YOY while the orange bars highlight the top-line revenue growth.  As each week goes by, we see these numbers bounce higher, across multiple forward quarters.

Overall net revenues continue to jolt higher as well.  We suspect the highlighted Q3 tally below will rise much further as the season wears on – very likely getting lost in the media “shuffle” to keep you afraid of the next boogeyman

 

Forward outlooks continue to expand from Refinitiv as well, rounding out solid metrics no matter how one slices it:

The forward 4-quarter estimate increased to $213.77 from $213.65 last week.

We suspect by the time we get to the actual 4 quarters of 2022, that number will be closing in on $225.00 – with at least $245.00 set for 2023.

The Confusion of Change

COVID permanently altered the way supply chains will work in the future.  Currently, hidden my chatter about other elements, China is witnessing a mass exodus of future support from the rest of the world for further capex investment in those supply lines.

The “stress” in the system right now – and likely for another 2-3 quarters as noted – is all of us witnessing a complete reshaping of those supply chains.

A massive amount of the benefit to be derived from this change – as the dust settles in the storm over the next 6-9 months – will fall to the US economy’s bottom line.

Let’s be aware of this though:  If we try to measure this “improvement” on a daily basis, it will be very difficult to see at ground level – hence the incessant / worrisome chatter, shouting from the rooftops and confusion from “experts” on a myriad of monsters awaiting us.

The facts remains relatively simple from a 50,000 foot view:  there is no developed nation on Earth as well prepared as the US is for the coming change as digitization takes over everything on the horizon.  We have massive waves of people of the proper age, in the proper places – to drive our economy strongly forward.

China on the other hand finds itself in nearly the opposite set of circumstances, with more 80-year olds than 10-year olds.

Remember – People Make Markets®

The Holiday Season

It is highly likely that we will hear all sorts of concerns about supply and empty shelves during the Holiday Shopping Season.  The one thing I have learned to never doubt is the USA consumer’s ability to successfully shop : ). Indeed, Dr. Ed famously noted years ago that even when consumers get down in the dumps – they shop even more.

As such, while it is likely to be sloppy for sure – expect records to be set as we welcome in the Season soon.

Buckle up – the rest of October could remain sloppy but the energy is forming under the market for solid benefits to come.

Until we see you again, may your journey be grand

and your legacy significant.