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The stock market has had a terrific run over the last nine sessions since the stunning reversal two Thursdays ago. Add on a likely Fed pivot and the move makes complete sense. But markets probably got a little too excited because the reality is that the economy is still mired in a nasty funk – and that isn’t about to change anytime soon. Exhibit A: Google’s (GOOG/GOOGL) just released 3Q22 earnings.

GOOG/GOOGL revenue increased only 6% year over year – though it would have been 11% if not for the headwind provided by the strong dollar. In addition GOOG/GOOGL operating margin got squeezed to 25% from 32% a year ago. As a result, EPS declined 24% from a year ago to $1.06. Clearly, this was not a great quarter and it is likely to bring the market back to reality starting tomorrow.

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