Fourth quarter earnings season commences today with the release of Citicorp’s earnings. At time of this writing, 4Q profits are expected to increase around 9%. For the year, earnings are forecasted to rise around 20%.
All will pay considerable attention to forward looking statements which could revise the 2019 outlook of a 7.7% gain in results. Generally speaking for the second consecutive quarter value earnings are expected to increase at a rate double of that of growth, a major reason why I believe the market has been met with great volatility.
There is little I can write about Friday’s market action. Concern is rising about the possible ramifications of the government shut down. Oil slumped following a 23% surge since its December 24 floor. Equities were essentially unchanged and Treasuries ended higher by 12/32.
This week the averages may be impacted considerably by profit results. Some economic releases will be delayed because of the shutdown thus suggesting the averages my trade in a void.
Last night the foreign markets were down. London was down 0.94%, Paris down 0.80% and Frankfurt down 0.66%. China was down 0.71%, Japan closed for a holiday and Hang Sang down 1.38%.
The Dow should open considerably lower over Chinese growth concerns and the growing concerns over the government shutdown. The 10-year is up 7/32 to yield 2.68%.
Chief Economic Strategist Managing Director
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