Back to top

Real Time Insight

Name one of the strongest patterns of this earnings season. That's right, weaker revenues.

Below are 3 charts that Goldman Sachs Global Economics, Commodities and Strategy Research team published on Friday after 120 companies in the S&P reported. ZeroHedge made these public on Saturday.

Again, this is only about a quarter of the S&P and we have 170-some companies reporting this week. But it is good early evidence of something Sheraz has been seeing in the data for weeks: declining margins.

How long can "lean and mean" corporate America keep squeezing more profits from fewer dollars?

There have also been some FX-related issues (stronger dollar) with earnings, but let's not get into that since FX flows are always part of the stormy seas corporations must endure. And the positive correlation between strong stocks/weak dollar will endure too as the S&P v the buck floats around +0.5.

Another interesting aspect of this earnings picture is how much a strong company and stock like Apple can carry the day, or the year. Goldman researchers also track the S&P 500 Equal Weight Index to seperate out the effects of mega-caps.

I have been watching the chart of this index (SPXEW) for a month now and it is fighting to stay above its 200-day moving average.

So, do you think this week's 173 reports can turn the tide of falling revenues (or, rather "raise" the tide)?

Or, given the weakening macro backdrop, is this due to continue and does this mean lower stock prices are inevitable -- especially as estimates are only due to come down?

Zacks Releases Their 7 Best Stocks for August, 2014

These 7 were hand-picked from the list of 220 Zacks Rank #1 Strong Buys with earnings estimate revisions that are sweeping upward. Their stock prices are expected to rise sooner than the others.

Today, this Special Report is available to new Zacks.com visitors free of charge.

Close This Panel X

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%
NUSTAR GP H… NSH 41.14 +2.59%