S&P 500

One of the recurring themes as we cross Q1 earnings season, is that virtually every sellside strategist has been repeating ad nauseam how as a result of the shaprly lowered earnings expectations...

... companies will have no problems beating consensus estimates. And then we got something like last week's week's barrage of tech company misses.

For many pundits this apparently did not register and just today BofA said that "1Q EPS expectations have likely bottomed as companies have begun to beat across the board." This is how it explained this observation:

The last time the S&P 500 "suffered" a Golden Cross (50-day moving average crossing bullishly above the 200-day moving average), it marked the top in December which was rapidly followed by a decline only coordinated global central manipulation could save. This time it is also being met with weakness as The Dow loses the key 18,000 mark, VIX jerks back above 14.5 and S&P is tumbling...

But for now no one is buying it...

In the US is most assuredly moving into, if not already in a recession.

The media trumpeted the amazing 2.0% growth rate initially forecast for the first quarter of 2016. That forecast has since collapsed to 0.3%. This is the same game Government beancounters have been playing for years: a great initial forecast that is then revised lower and lower.

The above suggest the US economy is flatlining. However, other data are far worse. We’ve seen 16 straight months of declines in Factory Orders (this never happens outside of recessions)

Ahead of two key central banks events this week, the Fed announcement on Wednesday - in which Yellen is expected to do nothing and most likely will continue the dovish relent first seen a month ago - and then the BOJ on Thursday (which also mark the anniversary of the second longest and most artificial bull market in history) where Kuroda is increasingly expected to shock with something even more ridiculous, global shares have fallen modestly around the world as oil declined on signs a global surplus of crude is likely to persist.

There is little joy for bulls in David Kostin's latest weekly kickstart, in which the chief Goldman strategist says that "the S&P 500 has reached our 2016 year-end target of 2100. We expect that the index will remain at this level given tepid US GDP growth, a mixed earnings outlook, and elevated valuation. Corporate repurchases are the main source of US equity demand. We forecast S&P 500 gross buybacks will rise by 7% to $600 billion in 2016.