Fed Tightening and Easing All at Once? | How Wrong Were Analysts on Earnings?
By Derek Moore
ZEGA CEO Jay Pestrichelli rejoins Derek Moore to talk Jay Powell and the Fed seemingly tightening and loosening all at once. They raised rates, but then increased the size of their balance sheet through the SVB (and other) bank bailouts. Then, observing the deep discounts, some REIT etfs are currently trading to NAV and what that infers. Also, Hindenburg research (a short seller) put out negative research on Block (Square). The role of short-selling firms and noting the high stock-based compensation impact on non-GAAP earnings in Block. Finally, Jay and Derek discuss the changes to sector classifications and the impact on financials, how bad a year 2022 was for both stocks and bonds together, and how earnings estimates look going forward and how far off analysts were last year. Of course, they’ll have some recommendations.
You can click below to listen:
- 2023 Q1 earnings estimates on the S&P 500 Index companies
- How the analysts brought down earnings estimates
- How off analysts were from their early estimates to actual earnings
- Hindenburg negative Block (Square) piece before they sold short
- SBC or Stock Based Compensation impact on GAAP earnings vs adjusted earnings
- Real Estate REITs seem to be trading below their NAV, are they ahead of the game?
- Goldman Sachs points out tightening financial conditions are a quasi-25-50 bps raise
- How the bank crisis may make lending standards tighter
- Will financials have a headwind on earnings due to tightening credit conditions?
- Fed balance sheet balloons up after bailouts of banks
- GICS sector re-classification by moving companies like Visa and Mastercard to financials
- They discuss whether sector re-classifications in many companies were the right fit
- Berkshire Hathaway holds Apple and other non-financials but are the highest weighted in XLF
- What the earnings outlook shows for first quarter through the end of 2023
- How far off analysts were when looking at their projections for Q4 22 a year out
- How much analysts estimates for sectors and the S&P 500 earnings change over time
- QT Quantitative Tightening and QE Quantitative Easing all at the same time?
- Treasury Secretary Janet Yellen confusing answers to congress on bank bailouts
- Did the Fed need to raise 25 bps to keep its credibility?
Mentioned in this Episode:
Sequence of recessions and what comes first
US Debt Bomb and Growing Interest Rates effects on US Federal Deficit and Budget
Bloomberg Odd Lots Podcast deep dive into state of commercial real estate and loans
Podcast Explaining Overnight Reverse Repos ON RRP by the FED
Jay Pestrichelli’s book Buy and Hedge
Derek’s new book on public speaking Effortless Public Speaking
Derek Moore’s book Broken Pie Chart