Earnings Guidance

Monday’s FT reported that “[d]uring the latest reporting season S&P 500 groups were three times more likely to say they would miss analysts’ expectations of third-quarter earnings than beat them. That was the worst guidance ratio since the final quarter of 2008, immediately after the collapse of Lehman Brothers.”

Intel on Friday cut its previous third-quarter sales forecast, citing weaker demand for its microchips amid the softening worldwide market for personal computers. The company supplies about 80% of PC microprocessors. Dell and Hewlett-Packard both recently lowered their earnings outlook for the next few months. Worldwide sales of PCs are expected to grow less than 1% this year, marking the second consecutive year of growth below 2%, according to International Data Corp.

Semiconductor industry analysts have been mostly lowering their 2012 and 2013 estimates, and forward earnings has been flat-lining since late 2009 following a dramatic rebound earlier that year. Even estimates for the Computer Hardware industry (which includes Apple) have been trimmed recently.

The same goes for Air Freight & Logistics, especially after FedEx management warned last week that the global slowdown is depressing the company’s revenues and profits. In fact, the industry's Net Earnings Revisions Index has been negative every month since August 2011.

Today's Morning Briefing: Bull on Steroids. (1) September is a good month so far. (2) October could be trouble. (3) The next two full moons over Iran. (4) Performance-enhancing central banks. (5) Stocks near five-year high despite bad economic and earnings news. (6) The worst earnings guidance since Q4-2008. (7) Intel and FedEx seeing global slowdown. (8) Flattening exports. (9) Obama will meet with Letterman, not Netanyahu. (10) Israel’s jumbo drones. (11) Now for a little good news. (12) Après QE, le déluge? (13) A broad bull market for now. (More for subscribers.)