'Buckle your seatbelts' because earnings will disappoint: Art Hogan

‘Buckle your seatbelts’ because earnings will disappoint: Art Hogan

Earnings season might flip an unsightly nook.

Lengthy-term bull Art Hogan warns a storm of disappointing company steerage and missed income targets is forward.

“Buckle your seatbelts,” the Nationwide Securities’ chief market strategist informed CNBC’s “Trading Nation” on Friday. “This will be the first time in the cycle you’re actually going to hear more companies guide down than guide up.”

Hogan cites headwinds tied to produce chain backlogs, inflation and employee shortages.

“There’s going to be a real earnings season of haves and have nots,” Hogan mentioned. “The haves really have that pricing ability.”

He cites Snap’s third quarter outcomes for example of upcoming bother. The social media large reported final Thursday a income miss, and it lowered steerage — citing bother in its promoting enterprise and world provide chain interruptions. Snap inventory is off 27% for the reason that announcement.

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“Aggregate demand is outstripping aggregate supply,” mentioned Hogan. “If you don’t have things to sell, you’re probably not increasing your ad budget.”

He desires long-term traders to withstand the urge to react to volatility and believes they need to take a barbell strategy to investing, with development on one finish and cyclicals on the opposite.

“Any given earnings reporting season is not the time to make a broad sweeping change to your long-term investments plan,” he mentioned. “But make sure you know what you have on your growth side, and make sure you’re picking companies that actually are sector leaders and are measured in a P/E [price-to-earnings ratio] versus price to revenues.”

He believes the ache will not trickle into year-end. His S&P 500 year-end goal is 4,700, which suggests a 3% achieve from Friday’s shut.

“We’ve got a long runway in front of us, and I think a lot of demand that wasn’t satiated this year gets dragged into 2022,” Hogan mentioned.

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