ZEGA CEO Jay Pestrichelli rejoins Derek Moore to talk Jay Powell and the Fed seemingly tightening and loosening all at once. They raised rates, but then increased the size of their balance sheet through the SVB (and other) bank bailouts. Then, observing the deep discounts, some REIT etfs are currently trading to NAV and what that infers. Also, Hindenburg research (a short seller) put out negative research on Block (Square). The role of short-selling firms and noting the high stock-based compensation impact on non-GAAP earnings in Block. Finally, Jay and Derek discuss the changes to sector classifications and the impact on financials, how bad a year 2022 was for both stocks and bonds together, and how earnings estimates look going forward and how far off analysts were last year. Of course, they’ll have some recommendations.
2023 Q1 earnings estimates on the S&P 500 Index companies
How the analysts brought down earnings estimates
How off analysts were from their early estimates to actual earnings
Hindenburg negative Block (Square) piece before they sold short
SBC or Stock Based Compensation impact on GAAP earnings vs adjusted earnings
Real Estate REITs seem to be trading below their NAV, are they ahead of the game?
Goldman Sachs points out tightening financial conditions are a quasi-25-50 bps raise
How the bank crisis may make lending standards tighter
Will financials have a headwind on earnings due to tightening credit conditions?
Fed balance sheet balloons up after bailouts of banks
GICS sector re-classification by moving companies like Visa and Mastercard to financials
They discuss whether sector re-classifications in many companies were the right fit
Berkshire Hathaway holds Apple and other non-financials but are the highest weighted in XLF
What the earnings outlook shows for first quarter through the end of 2023
How far off analysts were when looking at their projections for Q4 22 a year out
How much analysts estimates for sectors and the S&P 500 earnings change over time
QT Quantitative Tightening and QE Quantitative Easing all at the same time?
Treasury Secretary Janet Yellen confusing answers to congress on bank bailouts
Did the Fed need to raise 25 bps to keep its credibility?
Mentioned in this Episode:
Sequence of recessions and what comes first https://podcasts.apple.com/us/podcast/sequence-of-recessions-slowdowns-dividends-make/id1432836154?i=1000603802075
US Debt Bomb and Growing Interest Rates effects on US Federal Deficit and Budget https://podcasts.apple.com/us/podcast/us-debt-bomb-interest-rates-brewing-auto-loan-problem/id1432836154?i=1000602839094
Bloomberg Odd Lots Podcast deep dive into state of commercial real estate and loans https://podcasts.apple.com/us/podcast/where-stress-is-showing-in-the-%2420-trillion/id1056200096?i=1000604934309
Podcast Explaining Overnight Reverse Repos ON RRP by the FED https://open.spotify.com/episode/09VOIffldtn3WxNm7rzyNx
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr
Contact Derek firstname.lastname@example.org