After reading a tweet from someone on my Twitter feed, who thought the market was due for a nasty correction based on the number of excessive pre-announcements from SP 500 components, I decided to pull out some of my historical This Week in Earnings Reports (TWIE) and check the stats.
Here is the spreadsheet where I compare Q4 ’14, Q3 ’14 and even Q1 ’14 with Q1 ’15 data: FC – negtopospreannounce
A couple of items to point to readers:
A.) Although yesterday’s SanDisk (NASDAQ:SNDK) warning will no doubt influence the numbers we see today from Thomson Reuters, Q1 ’15 total S&P 500 pre-announcements are actually running a bit lower than Q1 ’14 and this is with the collapse of Energy earnings growth this quarter, and the strong dollar. As of last weekend, there were 94 negative pre-announcements for Q1 ’15, while as of the last week of Q1 ’14, there were 111 warnings.
B.) I actually expected Q1 ’15 to be much worse, especially relative to previous quarters, given prevailing sentiment.
C.) Be careful of those who use one single stat and general conclusions about data, without showing statistical support, to support their market view.
D) A line was added at the bottom simply showing the percentage of companies pre-announcing, and as you can see Q1 ’15 is about in line with Q4 ’14 and Q1 ’14.
E.) This is my own spreadsheet which I will update on occasion for readers, just to show historical data. Yes I am a single guy, and yes, the fact that I take the time to build these spreadsheets is such a sad commentary on my social life, that goes without saying, but readers should get the point, that if you do a little homework and you get access to good data like Thomson Reuters, Factset, Howard Silverblatt and others provide, you might actually come up with a different opinion.
Q1 ’14 was the heavy Midwest, Chicago, and Northeast winter, the first instance of Russia – Ukraine troubles, the Venezuelan currency devaluation, and a lousy tape for retailers.
There was a lot happening a year ago. Same as today.
When in doubt, go to the stats, like the geeks do…