Not much has changed in the stock market since I published my previous thoughts 6-8 weeks ago.
https://www.morganstanley.com/ideas/s-and-p-500-earnings-estimates-2023-too-optimistic
Notes to self:
- Look at companies/countries with large debts denominated in currencies stronger than their own (Turkey, for example, South-East Asia?)
- Anecdotally, I read somewhere that changes to the Fed Funds rate lag ~6 months, so if we use the first 750 basis point bump from last year (In June), we should start to feel the medicine now.
- Obviously, job cuts have started in earnest in HIGH-MULTIPLE TECH (Not a shocker there). These savings in payroll cost will help offset the sting of shrinking revenues; inflation squeezed margins in '23 (and those that can CONTINUE to MAINTAIN/GROW PROFITABILITY will be those MANAGEMENT TEAMS YOU WANT TO CELEBRATE)
- If you were unprofitable good luck; this is an extinction-level event I'm looking at you
W
- S&P 500 "Consensus" '23 Earnings: $228 (+4% YoY) REMIND ME: 6 months from now
- The operating margin of the S&P 500 Index, at 11.6%, is still near the all-time high of 13.1% reached in late 2021—notably above pre-pandemic levels of 10.2% and the rolling 10-year average of 9.4%.
- 2022 nominal revenues for S&P 500 companies were 8% above the 10-year trend.
https://www.morganstanley.com/ideas/s-and-p-500-earnings-estimates-2023-too-optimistic
Notes to self:
- Look at companies/countries with large debts denominated in currencies stronger than their own (Turkey, for example, South-East Asia?)
