I find it curious that the earnings estimates for Q4 earnings season (of the top 500 US traded public companies) is –4.1%.

Source: Factset

At the same time, Atlanta Fed’s GDP tracking tool GDPNow is saying GDP for Q4 tracked at +4.1%.  One of them is going to be materially wrong and my bet is company earnings (are too low).  With expectations so low, it sets up for a period of positive surprises moving forward.

Money Supply (tale of two “cities”)

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While US M2 money supply (above) is collapsing, China M2 money supply has been growing at double digits for over a half a year. Now that they have finally re-opened the economy, the effect of this easy policy will start to be seen in the economic and company data in coming months (on a lagged basis).  Where do you want to place your bets?

Now onto the shorter term view for the General Market:

In this week’s AAII Sentiment Survey result, Bullish Percent (Video Explanation) rose modestly to 24% from 20.5% the previous week. Bearish Percent ticked down to 39.9% from 42%. Sentiment is still fearful for retail traders/investors.

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The CNN “Fear and Greed” rose from 40 last week to 54 this week. Sentiment is neutral. You can learn how this indicator is calculated and how it works here: (Video Explanation)

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And finally, the NAAIM (National Association of Active Investment Managers Index) (Video Explanation) ticked down to 38.79% this week from 43.48% equity exposure last week.

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