View from 5th Avenue

The View at Two – 27th April, 2021

All Downhill from Here… Take a deep breath: we’re only 30% of the way through earnings but it doesn’t get any busier than this in terms of the combined market cap reporting today (chart below). That breath isn’t because things feel “hectic” at the moment (a lot of that market cap weight comes after the bell from MSFT / GOOGL), rather it’s to ease the frustration arising from the fact that at least so far, earnings season isn’t delivering the answers many had hoped for. Yes it’s hard to complain when we hit all-time highs as frequently as we are, and it’s not as if earnings have been a big disappointment (3/4 S&P co’s have beat EPS ests thus far), but they still haven’t produced a definitive sign as to what “comes next.” This morning’s slate of cyclical / reopening barometers is a good example: GE, MMM, and SHW delivered quarterly beats, but not without warts and none coming with upgraded FY guidance. Net result today: all three in the red, the results “good but not good enough” to justify the next leg higher with GE +26%, MMM +14%, SHW +10% (ATH though) already ytd. For now, the Reflation trade remains stuck...   

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