Earning season for 4Q22 is about to start and for the first time in at least two decades, Wall Street consensus points to a negative total return year for the S&P500. That is a direct consequence of restrictive monetary policy aimed at killing demand. Less demand means less sales, and less sales means lower earnings. And typically, less earnings, if low enough, mean more layoffs. That’s probably the picture the #fed wants to see to finish the hiking cycle, provided of course that, both headline and core cpi retreat to the target (or close enough) of 2%.
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