Chart Of The Week: Commodity Prices Vs. Corporate Earnings

By |2016-12-01T15:44:43+00:00August 14th, 2015|Categories: Technical Perspective|Tags: , , |

Summary Commodity crashes are typically associated with severe earnings contractions. Current expectations for flat calendar-year operating results seem overly optimistic in the present environment. A cautious outlook toward second-half earnings is advised. Will collapsing commodity prices clobber U.S. earnings? In six out of seven cases since 1970, commodity crashes exceeding 20% year-over-year have corresponded with earnings contractions exceeding 10% year-over-year. The lone exception occurred in 1998 when earnings decelerated to zero growth without actually contracting. Given this [...]

Are Lower Oil Prices Good for Everyone?

By |2016-11-17T16:27:12+00:00February 7th, 2015|Categories: UI Journal|Tags: , , , |

January 2015 sure started off with many mood swings. Thank you low oil prices. In December oil prices were still heading down but did not bottom out until January. Lower oil prices have a negative impact on corporate profits mainly in the energy and multinational companies. This triggers the U.S. dollar to strengthen which makes the U.S. products more expensive and less favorable to foreigners. The chart below shows the divergence between U.S. Dollar Index (yellow line) [...]

Behind the Scenes on Corporate Earnings

By |2016-11-17T16:27:27+00:00February 5th, 2015|Categories: UI Journal|Tags: , , |

The media discusses several topics and one frequently mentioned is the earnings report or earnings season. We hear Company XYZ beat their earnings or Company ABC missed their earnings. These are corporate earnings which simply indicate how much a company has made or lost during a specific period. Earning season begins a few weeks after the last month of each quarter and are important in determining whether the company has sustainable growth and reasonable outlook for the long [...]