While stocks continue their momentum-driven run, the bond market is still the ultimate canary in the coal mine.
The stock market has now weathered the bulk of an earnings season that was OK, on the surface, but not so great prospectively. On that note, I was forwarded a link to an article regarding the second-quarter letter from David Einhorn, Greenlight Capital’s founder and president, who made a point that I thought was worth sharing:
“Indeed, in the recent quarter, 70% of companies in the S&P 500 ‘beat’ the official street estimates, while forward estimates fell for roughly the same percentage of companies. At this point in the cycle, lowering the bar seems to be treated as bullish because it increases the likelihood of future earnings beats.”