Transcript:
Tom Vaughan:
Hello everybody, welcome to Tuesday. The S&P 500 was down about a quarter percent today. But if you look closely at the market, it really just kind of went sideways for the whole day. And we’re in a holding pattern right now as we get ready for these earnings reports to come out starting tomorrow. So the big companies like JP Morgan as such, we’ll be reporting tomorrow, for example.
And so one of the things that I think very fascinating is that we have often these conversations about things that could impact companies, like shortage of labor or the supply chain issues or the inflation that might be caused by those supply chain issues, affecting the earnings of these different companies. But what we really want to watch very closely is the actual earnings, and the conversation that’s happening on these earnings call. How much do they talk about those three issues: inflation, labor shortage and supply chain shortages? In terms of what’s happening with their earnings? And what guidance do they give going forward for the next quarter, the quarter after due to those areas?
Because that will show us a lot better information about what’s going on, because in the end earnings are what drive the stock market upward. It’s one of the true criteria for the market, … for growing markets to have continually growing earnings as far as that goes. So, how much are these things that we’re worried about on a macro basis, actually impacting the insights of these companies. Some of these companies are the best trading companies in the world, and they often have ways of kind of dealing with this, and still delivering pretty good earnings reports, so we’ll see what happens.
I would suspect there’s going to be an awful lot of forward guidance issues, talking about the possibility of earnings being lower. One of the key criteria for a CEO often is to under-estimate the amount of earnings you have, so that you can often come in at a higher amount. So, if I think I’m going to make $1,000 in earnings, I might report $850 or $900 as a possibility and site inflation, labor costs, these different things as as an issue. So, we’ll see how that happens. So we want to see what actually happened in the earnings for the third quarter, and then what the guidance is, and especially around those three areas of inflation and supply chain and labor, because those are the big ones that seem to be really be driving things at this point. So look forward to seeing what’s going to happen tomorrow, I’ll talk to you then. Thank you very much.