Published September 7th 2023

Daily Brief - 🌩️ Rising Earnings

TLDR: Lo and behold, what shines beyond yonder clouds? A comeback in S&P 500 earnings?

Trailing EPS graph

You hear us talk about New Orders often, and for good reason. New Orders are the key component of the PMI report, and they provide us with the most recent gauge of growth in the economy.

In this month’s report, New Orders for Manufacturing and Services both fell a tad. Mind, it’s nothing to cry ‘recession!’, but it simply does not match the ebullience we see in Citi US Economic Surprises. So what gives?

Most likely what we saw in Citi Surprises was an excess in pessimism being proven wrong. But in spite of PMIs dropping, earnings have shown us the most beautiful of trends: a nice pick up in realized earnings just at the end of the earnings season.

Where does that leave us? Probably with one more piece of evidence pointing to range-bound markets. We still doubt the market will be able to pierce 20x P/E, but if earnings don’t fall then neither should the market.

What's happening in the markets?

This section is powered by Open AI connected to TOGGLE AI

Saudi Arabia and Russia have decided to prolong their individual oil supply reductions for an additional three months, a move strategically timed as global fuel demand reaches unprecedented heights.

Their objective is clear: to bolster oil prices, thereby aiding their individual financial goals - Russia's war chest and Saudi Arabia's ambitious projects.

This deliberate "price over volume strategy" has propelled Brent crude prices to a significant $90 per barrel, historically a point of concern for the S&P 500's stability should prices remain elevated.

Furthermore, this development raises the specter of mounting inflation and heightened recession risks, as consumers find themselves compelled to allocate more of their budgets towards energy expenditures.

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Earnings Update: Gamestop reports tonight

GME:NYSE

Meme stock GME reports earnings tonight - let's see if the company's cost cutting efforts can help offset falling US sales of video games.

Discover how other companies could react post earnings with the help of TOGGLE's WhatIF Earnings tool.

Asset Spotlight: Low expectations for Boeing

Boing price graph

TOGGLE analyzed 30 similar occasions in the past where analyst expectations and trading volume for Boeing were at a low, and historically this led to a median increase in the stock's price over the following 3M. Read full insight!

General Interest: Table games help death-row inmates

Board game D&D

15 years ago humanity developed a new organ, and called it ‘smartphone’. Don’t believe it’s a life-sustaining organ necessary for everyday life? Try to lose it for a day. It’s like losing your sight or your manual ability.

With this new organ, came a flow of information and - most importantly - entertainment. Entertainment at a fingertip is probably one of the most underrated and yet impactful phenomena in our society.

A century ago underpaid workers would go home to the noise of a hungry family, and decide to strike. Nowadays workers go back to an empty home and get entertained by the next Netflix series.

All humans seek entertainment, especially under stress, and that’s certainly true for death row inmates whose civil liberties are all but stripped. For men awaiting execution in Texas,

The Marshall Project offers a harsh portrayal of the hardships of these inmates, and how illicit games of Dungeons & Dragons became a lifeline for them. Read more about it here.

Daily Brief - 🌩️ Rising Earnings

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