Comments on: The Crash Confidence Index http://www.tradersnarrative.com/the-crash-confidence-index-3116.html Freshly squeezed market commentary & analysis Thu, 18 Mar 2010 09:11:49 +0000 http://wordpress.org/?v=2.0.2 by: wayne http://www.tradersnarrative.com/the-crash-confidence-index-3116.html#comment-55714 Thu, 15 Oct 2009 16:34:47 +0000 http://www.tradersnarrative.com/the-crash-confidence-index-3116.html#comment-55714 yes, expanding on my comment, I was postulating as to why have analyst been so slow to upgrade earnings estimates, when LEI (and the stock market) have been strongly suggesting for 6 months that economy should be turning around. Just as why were analyst so slow to downgrade earnings estimates when LEI suggested strongly that the economy was slowing in fall of 2007. LEI is not infallible, but by definition "Leading" economic indicators should suggest future direction of economy, which translates into earnings. You can google Leading Economic Indicators for more insight. I have LEI data back to 60, but I am in the middle of another research project. Did you see the weekly unemployment claims # this morning also following link at CNBC http://www.cnbc.com/id/33327135 Again for those who have studied LEI, I understand it has it's faults, but how can you ignore the two very draconian trends in 09 and 07? yes, expanding on my comment,

I was postulating as to why have analyst been so slow to upgrade earnings estimates, when LEI (and the stock market) have been strongly suggesting for 6 months that economy should be turning around.

Just as why were analyst so slow to downgrade earnings estimates when LEI suggested strongly that the economy was slowing in fall of 2007.

LEI is not infallible, but by definition “Leading” economic indicators should suggest future direction of economy, which translates into earnings.

You can google Leading Economic Indicators for more insight. I have LEI data back to 60, but I am in the middle of another research project.

Did you see the weekly unemployment claims # this morning also following link at CNBC

http://www.cnbc.com/id/33327135

Again for those who have studied LEI, I understand it has it’s faults, but how can you ignore the two very draconian trends in 09 and 07?

]]> by: Babak http://www.tradersnarrative.com/the-crash-confidence-index-3116.html#comment-55706 Thu, 15 Oct 2009 04:06:02 +0000 http://www.tradersnarrative.com/the-crash-confidence-index-3116.html#comment-55706 interesting Wayne, so you're saying that LEI leads earnings? I haven't looked into LEI much but perhaps it deserves more attention. Almost 80% of S&P 500 companies have beat earnings estimates during this earning season but then again that's from sharply lower estimates. But, and this is a big but... most of that is coming from cost cutting not from top line revenue growth. Let me know if you find anything though. interesting Wayne, so you’re saying that LEI leads earnings? I haven’t looked into LEI much but perhaps it deserves more attention. Almost 80% of S&P 500 companies have beat earnings estimates during this earning season but then again that’s from sharply lower estimates. But, and this is a big but… most of that is coming from cost cutting not from top line revenue growth. Let me know if you find anything though.

]]> by: wayne http://www.tradersnarrative.com/the-crash-confidence-index-3116.html#comment-55696 Wed, 14 Oct 2009 16:24:39 +0000 http://www.tradersnarrative.com/the-crash-confidence-index-3116.html#comment-55696 Babak, posting here for lack of a better place, one thought regarding earnings I still think one of the best untold stories is recent guidance from LEI. Why are earnings coming in over estimates when we have had five sharp advances in LEI? 09 March 98.0 09 April 99.0 09 May 100.2 09 June 100.2 09 July 101.0 09 Aug 101.9 09 Sept 102.5 Just as Earnings estimates should have been sharply scaled down going into 2008 07 July 104.6 07 Aug 103.6 07 Sept 103.7 07 Oct 103.2 07 Nov 102.2 And I know the standard response is that LEI had forecast 12 of last 7 recessions. but these were unusually sharp trends in LEI. It is on my todo list, but there is a good story waiting here for someone who has time to properly tell it. Babak, posting here for lack of a better place, one thought regarding earnings

I still think one of the best untold stories is recent guidance from LEI. Why are earnings coming in over estimates when we have had five sharp advances in LEI?

09 March 98.0
09 April 99.0
09 May 100.2
09 June 100.2
09 July 101.0
09 Aug 101.9
09 Sept 102.5

Just as Earnings estimates should have been sharply scaled down going into 2008

07 July 104.6
07 Aug 103.6
07 Sept 103.7
07 Oct 103.2
07 Nov 102.2

And I know the standard response is that LEI had forecast 12 of last 7 recessions. but these were unusually sharp trends in LEI. It is on my todo list, but there is a good story waiting here for someone who has time to properly tell it.

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