U.S. company executives aren’t just talking down their earnings expectations. They’re putting their money where their mouths are – and they’ve been pulling it out of the stock market to do so.
The spike this quarter in profit warnings from U.S. companies has been worrisome to many earnings trackers, as the ratio of negative to positive earnings pre-announcements jumped to its highest levels since the depths of the 2008-09 recession. Still, the concerns have been played down in some quarters. Some argue that it’s merely caution in the face of some temporary uncertainties, setting us up for yet another quarter of substantial earnings beats or – at worst – one sluggish quarter followed by a rebound in profits later in the year.