Another Day, Another Record -- November 2, 2021

At the open: wow, wow, wow -- all three major indices set intra-day records. Again.  "Transports" at record high.

Later, 8:42 a.m CT: wow, wow, wow. They're reading the blog. They just saw the P/Es (see below). After being negative in pre-market trading, and negative yesterday, AAPL is now up 0.84%; up $1.28; back over $150.

P/Es:

• AAPL: 26
• EOG: 28
  
• COP: 48
• HES: 134
  
• really?

Zero Hedge: Sent to me by reader. Says earnings estimates still too high for 2022. The article begins:

Fundamentally speaking, there are more than a few indications that 2022 earnings estimates are still overly exuberant. However, the bullish optimism currently supports rising stock prices.

“Overall, 56% of the companies in the S&P 500 have reported actual results for Q3 2021 to date. Of these companies, 82% have reported actual EPS above estimates, which is above the five-year average of 76%. If 82% is the final percentage for the quarter, it will mark with the fourth highest percentage of S&P 500 companies reporting a positive earnings surprise since FactSet began tracking this metric in 2008. In aggregate, companies are reporting earnings that are 10.3% above estimates, which is also above the five-year average of 8.4%.”

But then this:

Earnings have indeed been impressive, but as we will discuss in more detail, this quarter will likely mark the peak of growth for a while. One particular reason is that while the outlook for earnings remains very bullish, economic growth and inflation trends are not.

My reply: 

I scanned the article but may have missed it. Author does not mention the $1.5 trillion infrastructure bill.

If the supply chain issue is resolved by mid-2022, all bets are off. 

Moments after writing that, Bob Pisani over at CNBC provided data points that corroborate my view: 2022 is going to be a blow-out year for investors. 

Bob Pisani: companies are reporting record earnings and yet they are -- across the board -- telling us their earnings would have been even higher had it not been for supply chain issues. Wow. Think about that. One of two things will happen in 2022 regarding the supply chain:

• it will get better;
• it will get worse.

Both mean that companies will report even better earnings. It's counterintuitive. But I know I'm right. LOL. 

But look at that ZeroHedge article again. This is simply incredible;

“Overall, 56% of the companies in the S&P 500 have reported actual results for Q3 2021 to date. Of these companies, 82% have reported actual EPS above estimates, which is above the five-year average of 76%. If 82% is the final percentage for the quarter, it will mark with the fourth highest percentage of S&P 500 companies reporting a positive earnings surprise since FactSet began tracking this metric in 2008. In aggregate, companies are reporting earnings that are 10.3% above estimates, which is also above the five-year average of 8.4%.”

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