This (PDF) showed up in my in box today. An excerpt of his hieroglyphics:
“As earnings season begins, it’s all about the outlook. As many equity and commodity markets rose over the past several quarters, investors were confronted with a broad set of challenges to consider including: 1) a potential U.S. housing double dip, 2) state and municipal government budgets issues, 3) financial bailouts of Greece, Ireland and Portugal, 4) inflation in developing countries such as Brazil, China, India and Russia , 5) Middle East and North African political conflicts, 6) an oil spill in the U.S. and 7) Japan’s earthquake/tsunami/nuclear disaster. This week earnings season begins with Alcoa Inc. (US: AA) announcing its quarterly financial results on Monday and other high profile firms including Bank of America Corp. (US: BAC), Charles Schwab Corp. (US: SCHW), Google Inc. (US: GOOG), Infosys Technologies Ltd. (India: INFO) and JP Morgan Chase & Co (US: JPM) providing updates on their businesses. MY TAKE: In the coming weeks, managements from hundreds of companies will share their views on navigating this uncertain environment and the potential affect to earnings results for 2011 and beyond. Positive quarterly results and outlooks will be critical components for maintaining the current market momentum. What is driving oil to a 2 1⁄2 year high? (See chart on page 2) On Friday, a barrel of Brent crude oil traded up to $126 in Europe (+34% YTD), while oil in the U.S. traded at $113 a barrel (+23% YTD). Dynamics contributing to the price increase include: 1) increased global demand for oil, 2) damaged oilfields in Libya, 3) uncertainty about elections in Nigeria (a large oil exporter), 3) possible increased gasoline demand during the summer driving season, 4) unresolved U.S. government budget issues and 5) speculative commodity trading activity. MY TAKE: If oil prices remain high, inflation expectations will likely increase, which could result in lowering consumption and slowing the economy. Investors will be paying close attention to comments from company managements in the coming weeks regarding the impact that higher input costs could have on earnings forecasts. NOTE: Given that U.S. housing prices and hourly wage trends remain weak and the government budget environment remains challenging, investors should consider the potential for both inflation (short term) and deflation (longer term). Global indications: The tone remains positive. As we approach earning season, investors are focused on the potential impact of elevated prices in oil and other commodities.”
The “ancients” were known to engage in “reading” the entrails of animals to forecast the future. That’s about the usefulness of that excerpt. If you want to know how trading performance like this is generated, we can help.
Hint: it’s not the stuff above.
