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Wall Street Braces for a Weak Earnings Season

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Moomoo News Global wrote a column · Jan 20, 2023 10:27
Stocks may have eked out gains so far in 2023, but don't be fooled. With corporate earnings season kicking off this month, Wall Street is pricing in a rough quarter ahead.
The estimated earnings decline for the $S&P 500 Index(.SPX.US)$ for the fourth quarter is -3.9%, falling from 9.6% on June 2022, which would mark the first year-over-year earnings decline reported by the index since Q3 2020 (-5.7%), according to Factset.
Source: Factset
Source: Factset
At the sector level, six sectors are now projected to report a year-over-year decrease in earnings for the first quarter, led by Materials, Health Care, and Utilities, and three sectors are predicted to report a year-over-year decrease in earnings for the second quarter. The Materials and Health Care sectors are the only two sectors predicted to report a year-over-year decrease in earnings for both quarters.
Source: Factset
Source: Factset
There are still glimmers of hope after this quarter.
Stocks could rebound in the second half of the year if the Fed begins to ease up on interest-rate hikes, resulting in lower bond yields. Equity prices are historically 10 times more sensitive to bond yields than they are to earnings, according to Joachim Klement, a market analyst at Liberum Capital.
If that holds true, Klement said, "there's a possibility we see quite a rally — if not the end of the bear market in 2023."
Source: Factset, the New York Times
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  • 72949275 : Earnings are going down simply due to people not spending, which is due to people not having cash, which is due to people having so much debt that they cannot afford anymore, and that means that people will suddenly say stuff it all, I am not going to pay anymore debts and walk away from the things that brought the debt in the first place.
    And there you have it, a worldwide depression caused by debt, and how much debt do people have ?
    Utterly, totally, and completely unbelievably overwhelmingly smothered in it.
    And the people they owe the debts to will not get it repaid.

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