- 95% of the companies in the S&P 500 have reported third-quarter results.
- Third-quarter 2012 EPS rose by 0.5% (above the consensus, which was down by 2%), but company share buybacks added about 1% to reported EPS. So, EPS before buybacks were actually -0.5%.
- Excluding financials, S&P earnings per share were -1.6%.
- 65% of S&P companies exceeded consensus forecasts, down from 69% a year ago. (The long-term average of beats is 60%, and the average beat since the Great Recession has been 74% over the past three to four years.)
- In third quarter 2012, 25% of the S&P reported worse-than-expected EPS vs. 22% a year ago. (The long-term average is 19%.)
- Third-quarter 2012 sales growth was a paltry +1.2%, as only 27% of the companies beat consensus while an outsized 54% missed expectations.
- Profit margins slipped modestly in the third quarter.
Thursday, November 22, 2012
Thursday, November 15, 2012
The U.S. economy was almost there, almost ready to spring higher, Jim Cramer told his"Mad Money" TV show viewers Thursday. But then Washington got involved, and all was lost. We're now facing the first congressionally mandated bear market we've ever seen, said Cramer, all because 536 people couldn't agree.
Cramer said it's downright infuriating, just when the housing market was beginning to recover, just when autos were getting stronger, when retail sales were growing and when the banks looked like they were finally finding their footing, Congress has been able to undo it all and send our markets sharply lower. For the year, U.S. stocks are now up just half of their counterparts in Europe, and Europe is in a recession.
So how can investors measure the damage and begin to ascertain when things might be getting better? Cramer came up with three indicators to help. First was the "Washington on TV" indicator. He said anytime the president or member of Congress gets on the air, expect the markets to go lower.
Cramer's second indicator was Lockheed Martin (LMT), the defense contractor with a 5% dividend yield. If the U.S. falls over the fiscal cliff, Lockheed will get hurt by both defense spending cuts and a rise in dividend taxes, Cramer noted, making this stock uniquely positioned to feel the blow.
Finally, Cramer said investors can use Cisco (CSCO), Home Depot (HD) and Petsmart (PETM)as gauges for Washington's damage. Cramer said all three of these companies posted stellar earnings, so if they can't hold onto their gains, no one can.
All of these indicators should help investors figure out whether the effects of the fiscal cliff are baked into the markets and whether its time to begin buying back in.