It is 2022 and a lot of weird things are finally happening. Inflation is running rampant, real estate is cooling and job growth is slowing. The Fed has executed 3 rate hikes this year. The hot stock market of the last two years has hit the brakes in 2022 and anyone closely involved is keeping an eye on Q3 earnings season.
Word on the Street
The polls are mixed where some believe the bottom is here and Q3 earnings season will show strength in corporate earnings. The realists, such as myself, believe that is much too optimistic a view and that corporate earnings will show evidence of a worsening problem linked to rising costs, declining consumer discretionary spend, supply chain challenges and good old classic bubble phenomena.
How it is Shaking Out
It is too early to tell, but so far the optimists believe that the results support their hypothesis. However, just yesterday after the bell, Meta (who we all know as Facebook) released disappointing results and seemingly instantly they lost 20% in value! 20%! My belief and conviction is that we will see more examples of the realities of the cyclical times.
Stay Tuned
A few stocks that I am following closely report earnings soon. Amazon reports today after close, Coinbase on 11/3 and Rivian on 11/9. The first and the last I believe are great companies with long term potential. The middle, not so much. Let’s see how this goes. Stay tuned!
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