The approaching earnings season is going to plain old suck, no thanks to the coronavirus.
Just take a gander at what investors will be up against as they are hit over the head with volumes of earnings reports starting with banks and industrials this week. First, the likelihood that some quite large companies won’t have any earnings to speak of — rather steep losses as the coronavirus blows through their financial statements. Second, the sweeteners to stock ownership — dividends and stock buybacks — will be curtailed significantly with companies headed into cash preservation and restructuring mode.
Not ugly enough? Well, then you will have CFOs unlikely to put forward any form of financial guidance — that’s if they haven’t yanked outlooks already in end of quarter pre-announcements. Good luck modeling future earnings, people. Meanwhile, earnings calls where executives often attempt to spin a positive narrative no matter the environment, will mostly be devoid of that hope that usually could rally a stock despite a bad quarter.
Unless you are an investor in companies packaging Spam or Twinkies, this earnings season will be taxing on the mind and potentially lethal to the trading account.
So true, Matt.
Economic firefighters around the world have a problem they’ve never seen before: a lightning-fast economic collapse strapped to a virulent global pandemic and wild, whipsawing financial markets threatening to amplify the damage.
From Washington to Brussels to Frankfurt to Berlin and beyond, officials in advanced economies are rolling out the biggest fiscal and monetary policy bazookas they’ve ever imagined. Some of the players, notably Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin, have forged a close fire-fighting partnership echoing their predecessors’ during the 2008 financial crisis. Officials who confronted the brink of economic calamity during a European debt crisis that began a decade ago — such as German Chancellor Angela Merkel and the new European Central Bank president, Christine Lagarde — are revising their playbooks and trying to avoid renewing the divides of that conflict.
Economists, traders and average citizens are all too aware that those efforts can’t stop the coronavirus, which is causing a once-in-a century human and economic catastrophe that’s still playing out with no clear end in sight. They’re starting to brace for a longer and deeper downturn than any of them imagined just a month ago when the mass shutdowns began across the global economy. And they’ve yet to grapple with the consequences of the economic damage rippling from the largest and strongest economies to the smaller and weaker ones with fewer resources.
Hello, lost generation.
The Millennials entered the workforce during the worst downturn since the Great Depression. Saddled with debt, unable to accumulate wealth, and stuck in low-benefit, dead-end jobs, they never gained the financial security that their parents, grandparents, or even older siblings enjoyed. They are now entering their peak earning years in the midst of an economic cataclysm more severe than the Great Recession, near guaranteeing that they will be the first generation in modern American history to end up poorer than their parents.
Those $1,200 federal payments to help Americans through the coronavirus crisis have started arriving in some people’s bank accounts via direct deposit. But many people will have to wait longer — and there could be pitfalls, such as debt collectors grabbing the money before you do.
Those who’ll be getting checks in the mail may not see them for weeks or even months. To get the money faster, millions of people will have to provide direct-deposit account information to the IRS.
The IRS is just starting to bring portals online to let people do that. The first went live on Friday, but it’s just for people who are not required to file tax returns. Another tool expected this week will allow everybody else to provide the IRS with account information for direct deposit if the IRS doesn’t already have it.