October 2016

// October 4th, 2016 // Daily News

Here’s proof that elections make corporate America nervous

CNBC.com
Companies historically tend to slash guidance ahead of elections, according to a Bank of America Merrill Lynch Global Research report published Monday.
In the note, titled “Election uncertainty may overshadow 3Q earnings,” the bank forecasted third-quarter earnings would average $30.25, below analysts’ expectations.
And while growth should improve heading into the end of the year, as headwinds related to oil and the stronger dollar have tapered, sales trends are weak, and the election may negatively impact results due particularly to uncertainty, wrote the equity and quantitative strategy team at BofAML Global Research, headed by Savita Subramanian.
“Guidance trends this year have paralleled history, where we found that management has typically grown more negative in the months ahead of US elections,” the note read, citing a new “concerning” trend that management has largely pulled back on issuing guidance altogether. While September tends to be a light month for guidance, with 60-70 instances on average, Bank of America Merrill Lynch counts just 16 instances of guidance by S&P 500 companies last month.
This, according to the bank, is a record low for any month in 16 years.
So if management feels uncertain in the future, should investors feel similarly? Perhaps, but perhaps not.
“It’s an excuse of convenience. I think it’s a good example of companies under-promising so they can over-deliver later,” Eddy Elfenbein, editor of the Crossing Wall Street blog, said Monday on CNBC’s “Trading Nation.”
Elfenbein said Wall Street “loves excuses that are particularly external.”
“So if there is a problem, they can say, ‘It’s not our fault, it’s Washington’s fault,’ and if there turns out to be no problem, then they beat expectations and then management can say how wonderful they are,” Elfenbein added.
This is not a cause for worry, according to Elfenbein, who said this is just “how Wall Street works.”
The note highlighted weak overall sales trends and sales “barely” beating analysts’ expectations in the third quarter. Growth expectations may not entirely point to a downtrend, according to one portfolio manager.
“We don’t think that there’s going to be a massive sell-off going into the end of the year because earnings are going to be cut; we believe that the Federal Reserve will continue to raise interest rates in December right after the election, hence maybe there will be more volatility going into Q1 or Q2 of next year,” Chad Morganlander, portfolio manager at Stifel Nicolaus, said Monday on “Trading Nation.”
Uncertainty will prove to be a drag on the overall economy, Morganlander added, and growth will likely remain stagnant.
“But nonetheless, earnings growth is going to continue to be nonexistent in 2017 as well as revenue growth,” he said.

Today’s Inspiration

Shine On!

by Joyce Meyer – posted October 04, 2016

The Lord make His face to shine upon and enlighten you and be gracious (kind, merciful, and giving favor) to you,
— Numbers 6:25

As you go through your day, ask the Lord to make His face shine upon you. Ask Him to lift up His countenance upon you and give you peace. Ask Him to shine His glory upon you, as He did with Moses. Then let that light so shine before others that they may see it and glorify your heavenly Father (see Matthew 5:16 KJV).

Letting your light shine can be as simple as putting a smile on your face. Practice smiling at others and you will find most of them smiling back. The light of God’s glory is in you, but if you never show it outwardly, people won’t be blessed. It is amazing what will happen if you will just be thankful, smile, and be nice to people. Show favor as often as you can to as many as you can. By so doing, you will receive favor, because we are told that whatever we sow is what we will reap (see Galatians 6:7).

Prayer of Thanks: I thank You, Father, for the opportunity I have to be a light in a dark world. Let Your light and Your life shine through me for others to see. I am grateful that with Your help, my life can be a blessing to others.

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