Mike Zigmont, author of the Zigmont Report, is a partner at New York-based Harvest Volatility Management, a hedge fund with over $10B AUM, offering volatility management solutions to its investor base worldwide. Mike has been publishing his daily newsletter (Monday-Friday) privately for the firm’s investors and his personal contacts in the investment business since 2008, sending it daily shortly after the market close.
The opinions expressed below are my own
Stuck. We aren’t moving. The first batch of earnings came through this morning and guess what? They all beat their guidance! Well whaddaya know? It’s a Festivus miracle. Anyway, 7 of those names gained today and 5 fell. The S&P was flat. Capital flow was light at 91%.
What did we learn?
We can extrapolate the rest of earnings season from what we’ve learned so far but it’s VERY prone to change but let’s just go through the exercise anyway.
- The earnings season narrative is going to be that earnings and revenues are growing at good rates (no surprise)
- Investors aren’t motivated by earnings season to behave differently than the last few weeks (somewhat surprising)
- Individual stock reaction to earnings reports are a crapshoot but the overall market will digest things positively (small surprise)
Feels like US equity investors are on autopilot. The strong tendency of the crowd is to get long(er).
Nothing in the mix of data so far is going to derail that trend.
See you tomorrow,