The Numbers Inside the Noise

This week, the data release velocity will spin up to warp speed as seventy-three S&P 500 companies hit the headlines and over two-hundred companies are due to report over the next three weeks.

So too will the improvements.

We expect year over year increases in both revenues and earnings to continue their steady expansion.  

And having already picked up more than two full percentage points (in the boxed data below) since earnings began last week, we suspect more is ahead:

The green bars (above) designate the earnings increases year on year while the orange bars highlight the top-line revenue growth.  

As each week goes by, we see these numbers bounce higher across multiple forward quarters.

Overall net revenues continue to jolt higher as well.  

We suspect the highlighted Q3 tally (below) will rise much further as the season wears on – though that message will very likely get lost in the media’s never-ending strategy of “focusing your attention on being afraid of the next bogeyman.”

Forward outlooks continue to expand (Refinitiv) as well, rounding out solid metrics no matter how you slice it:

• The forward 4-quarter estimate increased to $213.77 from $213.65 last week. 
• We suspect by the time we get through all four quarters of 2022, that number will be closing in on $225.00 – with at least $245.00 set for 2023.

The Confusion in Change

COVID permanently altered the way supply chains will work in the future.  

Currently, hidden in my chatter about other areas of investment, China is witnessing a mass exodus of future support from the rest of the world for further capex investment in those supply lines.

The “stress” in the system right now – and likely for another two to three quarters as noted – is all of us witnessing a complete reshaping of those supply chains.

There is a massive amount of the benefit to be derived from this change – as the dust settles in the storm over the next six to nine months – that will fall to the US economy’s bottom line.

However, if we try to measure this “improvement” on a daily basis it will be very difficult to see it at ground level - hence the incessant / worrisome chatter, shouting from the rooftops and confusion from “experts” on a myriad of monsters awaiting us.

The facts remain relatively simple from a 50,000-foot view: There is no developed nation on Earth as well prepared as the US is for the coming change as digitization takes over everything on the horizon; while China on the other hand finds itself in nearly the opposite set of circumstances, with more 80-year olds than 10-year olds.

Remember: People Make Markets®