Coiled Spring Capital Mid-week update Oct 19, 2022

We have to travel this week so we will not be back until the weekend report.

We wanted to give a quick update to our thoughts on the stock market. Early earnings numbers have been better than expected and driving the near-term direction. This is something we have been talking about and discussed last week. Pervasive earnings deterioration may not be visible yet while the macro data remains strong. Has the market over corrected the near-term earnings?

Earnings seasons are usually positive events, as most estimates get reduced into the prints, and thus stocks have already corrected the revisions. It's counter intuitive but the stock market is a discounting mechanism. It's still early and the bulk of earnings reports have not been delivered yet.

Rates remain sticky and above 4%. This remains a major issue for stock market bulls.

Subscribe to Premium to read the rest.