Trick or Trend: The stock market has a dangerous case of “earnings forecast” hubris right now

Trick or Trend: The stock market has a dangerous case of “earnings forecast” hubris right now

Based on existing analyst forecasts for earnings in all of 2021, the S&P 500 trades at almost 24 times estimates, among its highest valuations ever. To bring the multiple down to its long-term average of 16 times annual profits, companies in the gauge will have to make about 15% more than the equity researchers currently expect them to earn — in 2023.

Ho, hum: Another day another stock market record

Ho, hum: Another day another stock market record

Stocks climbed for a sixth straight day–the longest string of gains for the Standard & Poor’s 500 since August and with the Dow Jones Industrial Average turning in its best start for a February since 1931. The S&P 500 finished the day ahead 0.34% and the Dow gained 0.76% on the session. The NASDAQ Composite was up 0.95% and the NASDAQ 100 added 0.67%. The biggest winner for the day was the small cap Russell 2000, which gained 2.53% on strength in bank stocks and hope for more growth in the general economy. Oh, and the hope for $1,400 checks to individual Americans, hundreds of billions of dollars in state and local aid and enhanced federal unemployment benefits. And continued progress on the Covid-19 vaccination program. All this means, in my opinion, that the currently stretched valuations in this stock market are likely to get even more stretched in the coming days and weeks.

JNJ earnings a tale of two companies

JNJ earnings a tale of two companies

On April 16, Johnson & Johnson beat Wall Street estimates by 6 cents a share. Revenue for the first quarter of 2019 climbed 0.1% to $20.02 billion, above the $19.55 billion projected by Wall Street.But the results really reflected the very different fortunes of the company’s stagnant consumer business and its strongly growing drug business.

Notes You Need for October 23: Japanese stocks, Intel chips in Google phone, more on iPhone sales, earnings growth slow, dollar strength, rig count

Notes You Need for October 23: Japanese stocks, Intel chips in Google phone, more on iPhone sales, earnings growth slow, dollar strength, rig count

In my daily trawling through the market I come upon lots of tidbits of knowledge that I think are important to investors but that don’t justify a full post. I’ve decided to start compiling these notes here each day in a kind of running mini blog that I’m calling Notes You Need. It includes items like this from today: “10:40 a.m.: A teardown by iFixit showed that the Visual Core chip from Google’s new Pixel 2 phone is built on an Intel (INTC) chip. A Google spokesperson told CNBC that the “Pixel Visual Core is a custom designed process from Google” that the company built “with Intel.” Google also confirmed the Alphabet’s Wayne self-driving technology uses Intel chips.