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Earnings Season. Buckle Up!

By

While the fiscal cliff is behind us, investors have new worries such as the debt ceiling with which to contend.

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The Dow (INDEXDJX:.DJI), S&P 500 (INDEXSP:.INX), and Nasdaq (INDEXNASDAQ:.IXIC) came out of the gate in 2013 like three Quarter Horses with something to prove as each bolted up nearly 3% in only three days of trading. As we come to the first turn, the good news is that earnings expectations are low; the bad news is that expectations are still for more ups than downs.

Whatever the final results show, there will be plenty of excuses to go around that will range from Hurricane Sandy to Hurricane Fiscal Cliff. Many will be legitimate and many will be... the other kind. Hey, you want certainty? Go ask Mom to make you a grilled cheese sandwich. Anything more will be tough to find in today's financial world.

While the fiscal cliff is behind us (or whatever you want to call what they did), our brains have been rewired so the majority of investors are merely waiting for the next crisis of American financial leadership. Such is life when politicians are making economic decisions. Avoiding a worst case scenario has become the market norm. Talk about grading on a curve.

Hang tough and buckle up for the earnings fire hose of numbers that is about to blast away for the next few weeks. And just in case you're wondering, my mom makes a killer grilled cheese sandwich.

Click on the link below for an interactive version of the Wall of Worry or scroll down for the text-only column.



QE: Latest Fed minutes offering a chance of hawkish behavior later in 2013 sending a few equity field mice scurrying about.

US ECONOMY: Stealthy as it may seem, it is entering its fourth year of economic expansion. Getting a little long in the tooth?

UNEMPLOYMENT: Hard to get an accurate number in the US. Do you include the members of Congress?

INVESTOR SENTIMENT: Equities looking more and more like the only decent return game in town. And believe me, the money on the sidelines is searching every corner and inch of town.

HOUSING CRISIS: Some are saying it's over. My guess is that "some" haven't tried selling a house lately.

EUROPEAN ECONOMY: 2013 offers more contraction again, but at a lower percentage rate than in 2012 -- kind of like breaking the same ankle again, but not as severely. Winning!

THE EUROPEAN UNION: "One life, but we're not the same, we get to carry each other, carry each other, one, one…"

SOVEREIGN DEBT: Many countries at multi-year low rates. What was all the fuss about?

SPAIN: Still trying to get up the guts to ask for big money help, but why do today what you can put off until absolutely the last minute before financial collapse?

VOLATILITY: It's back, but mostly overnight and during weekends. Wonderful.

HIGH FREQUENCY TRADING:
Lloyd: So what was your winning percentage in 2012?
HAL: 50.7%. A new record!
Lloyd: And how much did you spend on technology upgrades?
HAL: Over $50 million. Another record!
Lloyd: Who's better than you?
HAL: Me?
Lloyd: Thought that might stump you.

CHINA: Getting our mojo back. And America, you can't have any.

STOCK MARKET TECHNICALS: "It's tricky, it's tricky, it's tricky-tricky, tricky-tricky…"

GLOBAL ECONOMY: This week, economists are saying that it is looking like it will be better in 2013 than in 2012 with the caveat that next week's update may say the exact opposite.

RETAIL SALES: Will they buy in the New Year what they didn't buy for Christmas?

JAPAN: QE in Japan entering its third decade. Now bigger and…well, bigger than ever.

GREECE: Treacherous economy, unemployment, and prospects -- or in short form, unchanged.

DRAGHI: Bigger bag of tricks may be needed in 2013.

EARNINGS SEASON: College football season ends, earnings season begins…"The circle of life…"

DEBT CEILING: The definition of insanity is "doing the same thing over and over and expecting different results" (Albert Einstein) to which I offer as exhibit A the Congress of the United States of America.

VOLUME: There ain't no "11" on this dial. Starting to wonder if there is even a "2."

US CONGRESS: These politicians give politicians a bad name.

US PRESIDENT: Dusting off the 14th Amendment for use in the ensuing debt ceiling debate. Too much dust on this one.


What Is Lloyd's Wall of Worry?
by Lloyd Khaner

Welcome to my at-a-glance guide to the issues facing investors this week -- a unique tool for traders and money managers.

Typically the term "wall of worry" refers to the entire body of concerns influencing stock market action. When the wall is high, meaning the market is nervous, stocks tend to get cheaper.

This wall of worry is even more specific. Every week I list the exact concerns in the marketplace and use the list to help me make buying and selling decisions. As I like to say, "Buy fear, sell cheer."

In other words, once the the wall rises above 15 blocks, start looking for deals. If the worry count sinks below 10, consider selling; prices have likely peaked.
SPY, QQQ, DIA, XLF, GLD
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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