Earnings Season

As we entered earnings season last night with Alcoa reporting, we were reminded by all those who talk about markets, that this is going to be a very ugly earning season. Alcoa did not disappoint, as revenue  and guidance came in weaker than expected. The S&P is now trading at an amazing 17 times this year’s earnings estimates. One could extrapolate that with markets trading at a premium to historical averages, that a pullback would be reasonable..


On the positive side, the weakening of the U.S. dollar and the stabilization of commodity prices would help US companies as it makes our products less expensive for foreign companies to purchase.  The effects will not be felt until probably 3rd quarter of 2016.


The dim forward view on global growth this morning by the IMF and the high S&P valuation does not  provide a catalyst for higher stock prices.

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