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The Backward K and Coming Earnings Surprises

The Backward K and Coming Earnings Surprises
The broad economic shutdowns and psychological impacts of the pandemic, along with massive doses of fiscal stimulus doled out directly to consumers greatly altered consumer and business spending habits.
As…

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The Backward K and Coming Earnings Surprises

The broad economic shutdowns and psychological impacts of the pandemic, along with massive doses of fiscal stimulus doled out directly to consumers greatly altered consumer and business spending habits.

As we approach the second-quarter earnings season, we are likely to see a good number of surprises, especially on a year-over-year basis. In the second quarter of 2020, some companies were struggling to keep the lights on.  Others were having trouble producing products fast enough to keep up with insatiable demand.

As our friend Peter Atwater correctly predicted in early 2020, the pandemic and its recovery would affect the economy in a K-shaped fashion. Essentially, there will be winners and losers.

With the pandemic abating and economic and consumer spending habits normalizing, some of those divergences from last year are reversing. Might we say the K is turning into a backward K?

This piece compares two companies to appreciate how and when the pandemic affected their revenues and stock price. It then looks forward to the question we face over the coming quarters; how and when earnings and share prices normalize. The analysis will allow you to prepare for earnings announcements from a host of greatly affected companies.

Graphing Distortions

Before presenting the two companies, it is worth sharing a few graphs. While just the tip of the iceberg, the graphs highlight the massive distortions caused by the pandemic and stimulus. We separate the charts between the Haves and the Have Nots.

The Haves:

The Have Nots:

Clorox

Clorox started in 1913 as the Electro-Alkaline Company. The company sells a wide range of popular consumer products, focusing on cleaning and disinfecting products.

Clorox Wipes were worth their weight in gold during the early days of COVID. It was common to find empty shelves in the supermarkets where Wipes should have been. As a result of surging sales of Wipes and Bleach, and other disinfectant products, CLX stock price jumped in the spring of 2000.

Today store shelves are fully stocked, and concerns about getting COVID from surface-born germs are fading quickly. Per Lisah Burhan, CLX Investor Relations: “The lower shipments are a result of demand normalization in bleach and Pine-Sol relative to the year-ago period when consumers turned to these products given the persistent out-of-stocks in wipes and sprays at the onset of the pandemic.”

With the normalization process underway and pandemic conditions abating, we compare some fundamental data for CLX before the pandemic and during the pandemic. This analysis allows us better to evaluate CLX’s price and potential for earnings surprises.

Fundamentals CLX

The graph below charts CLX revenue and income over the last 30 years. The pandemic-related spike in revenue and income is evident. From 2012-2019, revenue and income grew by 1.6% and 6.4%, respectively, on an average annualized basis. From 2020 through the first quarter of 2021, they rose 17.7% and 10.3% on an annualized basis. The pandemic was great for CLX’s bottom line.

The pandemic equally benefited shareholders. From January 2020 to August 2020, CLX shot up 60%. Compare that eight-month gain to the average annualized return of 8.4% for the three years before the pandemic.

Because of the predictable trending nature of CLX’s sales, we compare its current share price to expected sales to help us arrive at a fair value. We can then value the stock assuming revenue and Price to Sales (P/S) ratio reverts to its pre-pandemic trend.

As shown below, the bump in quarterly revenue and stock price during 2020 and the partial normalization is clear. The dotted blue line indicates the revenue trend from 2015 through 2019.

CLX revenues will likely return to trend as the demand for their products normalizes. Accordingly, we should expect revenue to decline from $1,781 to $1,591. In the fourth quarter of 2019, its P/S ratio was 12.65. At its current price and trend revenue ($1,591), CLX has a P/S ratio of 14.06.

CLX is trading at an 11% premium if we assume its revenue and P/S ratio return to pre-pandemic trends.

Sysco

Sysco (SYY) is an acronym for the Systems and Services Company. SYY is involved in the marketing and distribution of food products and kitchen equipment to restaurants and other institutional foodservice clients. Sysco is not as well known by the public as CLX as they predominately service businesses. Regardless, SYY has a market cap of $40 billion, about twice that of CLX.

Not surprisingly, SYY struggled during the pandemic. Many of its clients were either shut down or relegated to a fraction of their prior business. With people eating out again and offices opening back up, SYY is on the road to recovery.

CEO Kevin Hourican made the following comments during their latest earnings call in May of 2021: “We see tremendous pent-up demand in the food-away-from-home sector. Our data confirms that consumers are eager to eat at restaurants as soon as restrictions are reduced. Strong sales results and long wait times are common in restaurants operating within geographies that have limited restrictions. The third quarter can be aptly described is difficult at the beginning and robust at the end.”

As we did with CLX, let’s compare fundamental data for SYY before the pandemic and during the pandemic.

Fundamentals SYY

The graph below charts SYY revenue and income over the last 30 years. The pandemic-related reduction of revenue and income is startling. From 2012-2019, revenue and income grew by 5.4% and 4.8%, respectively, on an average annualized basis. From 2020 through the first quarter of 2021, revenue shrunk 22.4% on an annualized basis, and net income, which was running $6.7 billion per year, went negative.

The pandemic was painful for SYY shareholders. Between January and March of 2020, the stock price was cut in half, falling to a price last seen in early 2016.  Before the pandemic, SYY was returning 15% per year on average.

Like CLX, SYY is in a relatively stable and predictable business with dependable revenue trends. The reliable trending nature of their business allows us to do the same analysis we did with CLX.

The following graph zooms in on the data in this analysis. The drop in quarterly revenue and stock price during 2020 and the partial recovery are apparent. The dotted blue line is the revenue trend from 2015 through 2019.

If SYY sales return to normal, we should expect revenue to increase sharply from $11,824 to $16,278. In the final quarter of 2019, its P/S ratio was 3.27. At its current price and with trend revenue, its P/S ratio is 2.37.

SYY is trading at a 27% discount if we assume its business and valuations return to pre-pandemic trends.

Summary

SYY shares are about 10% below their value on 12/31/2019. At the same time, the S&P 500 Index is up about 25%. SYY’s revenue and income remain well off the levels of 2019. How and when SYY recovers is challenging to estimate. However, if they return to 2019 earnings levels more quickly than expected, the share price has significant upside potential. A strong earnings report will likely accompany a surge in the stock price.

Conversely, CLX will try to maintain higher revenue and sales despite what is likely a trend back to pre-pandemic norms. CLX share prices run the risk normalization occurs quicker than expected, and the pandemic premium vanishes in a short period.

SYY and CLX are just two examples of companies that can surprise investors with upcoming earnings announcements. The point is not to single out companies and make predictions but to highlight there are a host of companies with a potential for earnings surprises, positively and negatively. Economic activity a year ago was irregular and economic activity this last quarter is equally unusual.

Understanding what has transpired may open the door to several opportunities and a few stocks to stay away from.

Good luck in what is likely to be a widely divergent earnings season.

The post The Backward K and Coming Earnings Surprises appeared first on RIA.

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Government

Tesla And Hertz – Whatever Next…

Tesla And Hertz – Whatever Next…

Authored by Bill Blain via MorningPorridge.com,

“Democracy is absolutely the worst form of government, except for anything else…”

Tesla’s rise into the $1 trillion club is extraordinary – proving…

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Tesla And Hertz – Whatever Next...

Authored by Bill Blain via MorningPorridge.com,

“Democracy is absolutely the worst form of government, except for anything else…”

Tesla’s rise into the $1 trillion club is extraordinary – proving that listening to what the momentum crowd is buying, while suspending disbelief and fundamental analysis is one road to success. Hertz is a lesson in seizing the moment – its stock gains and free publicity from its new EV fleet will likely exceed the cost of the cars!

As I write this morning’s Porridge I am going to try and not sound like a bitter and twisted old man….

I suppose today’s lesson today might be: “Don’t over think it.” Every morning I wake up and try to make sense of the market noise to discern the big forces acting on markets, the underlying rationales, what the numbers really mean, the potential arbitrages, and the direction of trade flow. But I wonder if I’m doing it wrong.

It’s not what I think that matters. The only thing that’s important is what the market thinks.

The market is simply a voting machine where suffrage is simply the price of a stock. If the market believes Donald Trump’s sight-unseen social media empire is worth billions, so be it. If the market believes Meme Stocks are worth trillions, so be it. Whatever the market believes.. so be it.

As so many clever economists and traders have spotted before me.. it’s the madness of crowds that matters. Over the last few years understanding Behaviours has proved far more useful than forensic accounting skills when it comes to stock picking.

I make the mistake of calling out the inconsistencies of the “drivers” like Adam Neumann, Cathie Wood, Elon Musk and the Eminence Noirs driving SPACs and funds – rather than understanding what makes them look so attractive, clever, clearsighted and intuitive to so many market participants. Promise most people you are going to make them unfeasibly rich – and they will listen.

I make the schoolboy error of asking.. how?

Life is full of regrets. If we let them define us – we truly would be miserable.

Do I regret dumping Tesla in the wake of the cave-diving comments scandal? I reckoned it was massively overpriced around $70. Ever since I have pontificated why it’s not worth a fraction of even that valuation. I don’t regret selling, but I acknowledge I’ve been wrong about the price. But not because I got the fundamentals wrong – I misread the crowd. Failing to understand the momentum was my failure. I am less wealthy than I could have been.

Tesla is worth a Trillion dollars plus. Elon Musk is the richest guy on the planet. These are facts.

Tesla, remarkably, has become a great auto-company. It makes good cars. It understands the logistics of super-charging networks. It has front-run the switch from ICE to EVs, making them mainstream, leading a massive industrial shift, and forced the rest of the sector to play catch up. It changed the perception of EVs from milk-carts to desirable luxury status symbols. It will successfully open new plants and sell more cars. It’s the number one selling car in Europe this quarter – possibly because no one else can get hold of chips!

Perversely, Tesla’s success demonstrates momentum can take a company to fundamental strength. For much of Tesla’s life, sceptics like myself predicted it would stumble and fall, brought down most-likely by apparently insurmountable production problems, its debt load, or regulation. It didn’t happen. Instead it survived, thrived and has been able to reap the momentum and build a strong balance sheet on the back of its extraordinary stock price gains. It could potentially acquire whole swathes of its rivals and supply chain.

It’s been an extraordinary climb from likely disaster to undeniable success – and the one constant has been the support of dedicated Tesla fans. Frankly, it flabbergasts me just how Elon got away with it… but he did.

At this point you are expecting a But…

But…. What would be the point?

In the mind of the crowd facts like how 10-year old Telsa only just started making profits on selling cars don’t matter. Its consistently made profits for the last 2.25 years – largely from selling regulatory credits. Prior to that… Tesla racked up losses. It has consistently failed to deliver so many promises on deliveries, automation and new models. None of these facts matter.

It’s what the market believes that matters.

So, there is no point looking at Tesla this morning and trying to explain how it’s worth a trillion – a multiple of the much larger and more profitable Toyota. Let’s not wonder  why many analysts reckon its going higher. There is no point trying to fathom why a $4.2bn order from newly out-of-bankruptcy Hertz caused the stock price to ratchet up $110 bln yesterday.

This morning analysts are predicting Tesla stock will go higher, building from the “breakthrough psychological level of $900, right through the key $1200 milestone level, and then the next level is $1500.” There was nary a mention of its PE, fundamentals, margins or such irrelevancies… just that its going higher.

Meanwhile…

The Hertz trade is fascinating – Hertz has generated tremendous publicity for its re-launch, and enough stock upside to pay for the cars! It steals a march on any other hire firm wanting to build a fleet of EVs. Hertz went bust early in the pandemic and sold its whole fleet. But, as signs of economic recovery first appeared it became the perfect recovery play. After a bidding war, it was bought out from bankruptcy and restarted with a clean sheet. It now has its very own army of meme stock proponents. Its stock price has more than doubled to $12 on the OTC market.

The fact car hire firms are vulnerable businesses in a highly competitive market, or there are now literally hundreds of new EV makers, in addition to the incumbent ICE auto-manufacturers – all now competing in the EV space for Tesla’s lunch – doesn’t matter.

For now.

Always bear in mind Blain’s Market Mantra no 1: The Market has but one objective: to inflict the maximum amount of pain on the maximum number of participants.

Tyler Durden Tue, 10/26/2021 - 08:00

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Economics

Technically Speaking: The Bull & Bear Market Case – Part 2

Last week’s "Technically Speaking" covered the first part of the bull and bear market case as we head into the end of the year. As we noted, investors face a conundrum between year-end seasonality and the Fed starting to taper its bond-buying program….

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Last week’s “Technically Speakingcovered the first part of the bull and bear market case as we head into the end of the year. As we noted, investors face a conundrum between year-end seasonality and the Fed starting to taper its bond-buying program.

I received lots of comments about the article from individuals pointing out their perspectives on the market. In addition, there were enough excellent comments to derive a follow-up to last week’s post.

The dichotomy of views is broad. Numerous articles recently discussed how the bull rally would emulate that of the 1920s. Others discuss the biggest crash ever is coming. The problem is wading through the noise to discern the underlying risk at any given point.

It’s challenging to do. Such is why so many advisors charge clients a fee for “buy and hold” strategies. Since there is a lack of knowledge or experience to manage risk, they tell clients they can’t do any better than deal with the eventual losses.

That isn’t investing. That is a capitulation to laziness, a lack of research, and a lack of defined investment discipline and strategy. While such approaches seem to work while markets are rising, financial goals get permanently destroyed when markets eventually decline.

If such was not the case, then why, after two of the largest bull markets in history, are 80% of Americans woefully unprepared for retirement?

While the promise of a continued bull market is very enticing, it is essential to remember that all markets ultimately complete a “full cycle.” Therefore, if your portfolio, and eventually your retirement, depends on the thesis of an indefinite bull market, you should at least consider the following charts.

The Bullish Case

1) Sentiment

Despite the recent correction in the market, bullish sentiment has quickly returned to the market. As a result, the CNN Fear & Greed Index is back to “greed” levels after the latest rally. However, the index gets heavily influenced by the movement of the market.

Our “Fear/Greed” index gets based on how investors allocate to the market without any influence from market price changes. While our index declined with the recent correction, investors have quickly piled into equity risk over the last week.

What is clear, judging by the surge in SPACs like Digital Media (DWAC) last week, investors have been quick to jump back into some of the most speculative assets recently without regard to the underlying risk. But, of course, such is also a sign of a high degree of “complacency.”

2) Complacency

At the moment, there are plenty of concerns, but investor psychology remains hugely bullish. Most concerns are well known, and, as such, the market discounts them concerning forward expectations, valuations, and earnings projections. However, what causes a sudden “mean reverting event” is an exogenous, unexpected event that surprises investors. In 2020, that was the pandemic-related “shutdown” of the economy.

Currently, as shown by the collapse in the volatility index over the last couple of weeks, investors are highly confident that a “correction” will not occur.

“The Volatility Index (VIX) closed at a new 18-month low as the S&P 500 closed at a new multi-year high on Thursday, 10/21/21. If you were wondering, the 18-month low in the VIX Index represents the first occurrence since November 2017.” – Sentiment Trader

It is worth remembering the market had three 10-20% corrections in 2018 as low volatility begets high volatility.

Stocks Earnings Risk 10-22-21, Stocks Surge As Earnings Roll-In, But Is Risk Gone? 10-22-21

3) Earnings Expectations

Currently, significant support of the bullish advance remains the rather exuberant expectations of earnings heading into the end of the year. With estimates very high, forward valuations are dropping as market prices remain at the same level currently as in August.

As long as expectations get met, the bullish advance can continue. Furthermore, as noted last week, with the buyback window opening November 1st, that support for asset prices will continue into year-end.

So with this very bullish backdrop for equities short-term, what is there to be worried about?

The Bearish Case

1) It’s Been A Long Time

As noted this past weekend, the S&P 500 index has gone 345-days without violating the 200-dma. Such is the sixth-longest streak going back to 1960.

Stocks Earnings Risk 10-22-21, Stocks Surge As Earnings Roll-In, But Is Risk Gone? 10-22-21

While investors are currently starting to believe that a test of the 200-dma won’t happen, there are several points to be mindful of.

  1. Corrections to the 200-dma, or more, happen on a regular basis.
  2. Long-stretches above the 200-dma are not uncommon, but all eventually resolve in a mean-reversion.
  3. Extremely long periods above the 200-dma have often preceded larger drawdowns.

The most crucial point to note is that in ALL CASES, the market eventually tested or violated the 200-dma. Such is just a function of math. For an “average” to exist, the market must trade both above and below that “average price” at some point.

2) Lack Of Liquidity

Since the pandemic-driven shutdown, there has been a flood of liquidity into the financial system. In the short term, that liquidity supports economic growth, the surge in retail sales, and the explosive recovery in corporate earnings. That liquidity is also flowing into record corporate stock buybacks, retail investing, and a surge in private equity. With all that liquidity sloshing around, it is of no surprise we have seen a near-record surge in the annualized rate of change of the S&P 500 index.

Stocks Earnings Risk 10-22-21, Stocks Surge As Earnings Roll-In, But Is Risk Gone? 10-22-21

“However, as stated, there is a dark side to that liquidity. With the Democrats struggling to pass an infrastructure bill, a looming debt ceiling, and the Fed beginning to “taper” their bond purchases, that liquidity will start to reverse later this year. As shown below, if we look at the annual rate of change in the S&P 500 compared to our “measure of liquidity” (which is M2 less GDP), it suggests stocks could be in trouble heading into next year.”

Stocks Earnings Risk 10-22-21, Stocks Surge As Earnings Roll-In, But Is Risk Gone? 10-22-21

While not a perfect correlation, it is high enough to pay attention to at least. With global central banks cutting back on liquidity, the Government providing less, and inflationary pressures taking care of the rest, it is worth considering increasing risk-management practices.

3) Bad Breadth & Volume

In the very short term, despite the bullish market rally, the technical backdrop remains exceptionally weak. However, to expand on a point from last week, breadth remains dismal, with only 60% of stocks above their respective 50-dma even though the index is at all-time highs.

Stocks Earnings Risk 10-22-21, Stocks Surge As Earnings Roll-In, But Is Risk Gone? 10-22-21

Moreover, while our “money flow buy signal” reversed to previous highs, volume dissipated sharply during the advance. Such suggests that “commitment” to the market rally remains lacking, and liquidity is thin.

Stocks Earnings Risk 10-22-21, Stocks Surge As Earnings Roll-In, But Is Risk Gone? 10-22-21

Plenty Of Risk, Limited Reward

While anything is possible in the near term, complacency has returned to the market very quickly. As noted, while investors are very bullish, there are numerous reasons to remain mindful of the risks.

  • Earnings and profit growth estimates are too high
  • Stagflation is becoming more prevalent
  • Inflation indexes are continuing to rise
  • Economic data is surprising to the downside
  • Supply chain issues are more persistent than originally believed.
  • Inventory problems continue unabated
  • Valuations are high by all measures
  • Interest rates are rising

Furthermore, as noted above, there is limited upside as the annual rate of change in the market declines.

So what do you do?

As discussed last week, we believe additional equity exposure gets warranted due to the bullish case. However, the longer-term dynamics are bearish. 

For now, we remain optimistic about the markets due to liquidity, seasonality, and bullish sentiment. However, we remain concerned about the broader macro risks, which keep us cautionary. Therefore, it is crucial to stay unemotional and focus on managing your portfolio.

Such is why focusing on “risk controls” in the short-term, and avoiding subsequent significant draw-downs, will allow the long-term returns to take care of themselves. The following are the “control boundaries” under which we operate.

Everyone approaches money management differently. Our process isn’t perfect, but it works more often than not.

The important message is to have a process that can mitigate the risk of loss in your portfolio.

Does this mean you will never lose money? Of course, not.

The goal is not to lose so much money you can’t recover from it.

The post Technically Speaking: The Bull & Bear Market Case – Part 2 appeared first on RIA.

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Spread & Containment

UK Faces ‘Plan B’ Peril: COVID Multiplies The Economic Threat

UK Faces ‘Plan B’ Peril: COVID Multiplies The Economic Threat

Authored by Bill Blain via MorningPorridge.com,

“T’was the best of times, t’was the worst of times …”

The risks of Plan B and a further Covid Lockdown are multiplying….

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UK Faces 'Plan B' Peril: COVID Multiplies The Economic Threat

Authored by Bill Blain via MorningPorridge.com,

“T’was the best of times, t’was the worst of times …”

The risks of Plan B and a further Covid Lockdown are multiplying. It will clearly impact markets, but the real economic effects of Covid combined with energy costs, supply chains and bleak company earnings forecasts may be pushing us towards stagflation anyway.

"How to address the biggest economic shock in 300 years?” asked UK Chancellor Rishi Sunak while doing his pre-budget politicking last week. Whatever you believe or don’t believe about Covid, Sunak is quite right to consider it at the centre of the on-going economic crisis. Markets should factor that reality accordingly – which boils down to a very simple question: how much will Covid force Central Banks and Governments to act to stabilise the global economy?

This week pay attention to the UK Budget on Wednesday on how Chancellor Sunak addresses the ongoing critical-care needs of the UK by stepping away from his previous “policy-mistake” sounding mention of austerity spending cuts and tax-rises to make noises about increased “levelling out” spending. Hanging over everything will be the question – how much more economic pain could Covid inflict?

It’s a tough question.  A new lockdown would be economic suicide. The UK government plans to ride it out – but the history of the last 19 months says they won’t hesitate to make a U-Turn and institute Plan B if they think their credibility is on the line if the numbers of infections surge and the health service looks swamped. That’s a potential trade: should you sell UK stocks now on the likelihood the government will panic? (And buy-them back almost immediately as the Bank of England stops the noise about a rate cut and QE taper.)

But… another question is how much will rising infection numbers cause the economy to contract anyway? How much has confidence already been dented?

Here in Blighty, It’s a tale of two headlines:

Daily Mirror: Fears of new lockdown Christmas as scientists warn tougher Covid measures needed NOW.

Daily Telegraph: Coronavirus cases to slump this winter, say scientists.

The papers looks like it boils down to a political split – which may reflect the UK’s national pride in our venerable National Health Service. How much we are prepared to sacrifice to protect the sacred cow of the NHS has become a badge. The left-leaning, Labour supporting Daily Mirror is peddling one set of scientific views, while the daily journal of the Conservative Party, the Torygraph, finds another set of white-coats to quote.

What does the threat of Plan B or further lockdowns mean for the UK economy? A quick glance round the motorway service stations we stopped in yesterday shows many more people wearing masks, and I’ll be interested in how many people start working from again as the perceived threat level rises.

I wonder how rationally people consider the pandemic. The vector for the rise in infections is schoolchildren being children – their interactions will diminish this week due to mid-term holidays. Back in September, a British Medical Journal report (How is vaccination affecting hospital admissions and deaths?) said 84% of hospital admissions before July had not been vaccinated, although rates of vaccinated infections were rising – their conclusion was simple: unvaccinated people are 3 times as likely to go to hospital and 3 times more likely to die. There is a broad consensus the efficacy of vaccines wanes after 5-6 months – hence booster shots.

Maybe the best way to move forward is the Swedish solution of taking personal responsibility to rising infection numbers? However, research in the Guardian earlier this year suggests that strict-lockdown Denmark and easy-going Sweden experienced similar levels of economic dislocation, but Sweden suffered a death rate 5 times higher than Denmark! It’s down to behaviour – Sweden kept the schools, offices, shops and pubs open, but people got careful, stopped going out and kept the kids at home anyway.

As the supply chain crisis continues, and energy prices go through the roof, we already know it’s going to be a tough holiday season – retailers warning of toy shortages and price hikes on scarce Turkeys. It impacts consumer behaviour – we all want to spend, but if we can’t because of rising prices and falling incomes, and it feels dangerous to do so – then what effect does that have on spending patterns? It’s got to be negative.

We’re seeing the supply chain effects beginning to hit corporate results – an increasing number of firms have been giving lacklustre holiday earnings guidance. Intel took a spanking last week on the back of expectations of a downbeat outlook. Snap got pummelled on the back of a disappointing Q3 number. This week is big for Big Tech earnings – and names from Apple to Amazon could be pummelled by supply chain shortages and the problems these cause meeting holiday demand.

Headlines about a downbeat Apple sales forecast have consequences – not just in making global consumers a little more depressed about the future.

The very first thing junior economists learn about is multiplier effects – on consequences as lay-people call them. A company finds it can’t get it full allocation of Christmas units to sell so it cuts advertising, cuts stuff overtime and starts planning to cut investment in new plants, warehouses and future spending. Repeat over the whole economy, and with everyone with less in their pockets… as “transitory” inflation feels increasingly permanent, and you’ve got a perfect recipe for stagflation.

I often get accused of being a misery-guts and far too negative about the state of the global economy. My own market mantras include the classic: “Things are never as bad as you fear, but never as good as you hope”.

Think about that for a moment. Covid caused the greatest economic downspike in 300 years, but the actions of swift government interventions to prop up commerce and fuel consumer spending kept the global economy functional, but wobbly. The markets quickly began to anticipate recovery and upside – yet these remain vulnerable to the news and perceptions around this Coronavirus.

Covid fears are multiplying again. Renewed Covid instability on the back of lockdown news from China, Europe, Australasia, wherever, will continue to roil markets. Supply chains remain fractured and the consequences of the virus effects on the global economy will continue.

Get used to it…

Tyler Durden Tue, 10/26/2021 - 03:30

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