Happy Tuesday. Good Luck out there this week.
Global Spotlight
The White House Hunt for Currency Manipulators. The Trump administration has pursued a multipronged approach to target countries — including China, Germany, Japan, Mexico and Vietnam — that it believes engage in currency manipulation to sell their goods more cheaply in the United States.
So Long, Farewell, Theresa May. Theresa May has finally given up on delivering Brexit, which means that the next British prime minister could be a hard-liner who thinks that a no-deal exit from the European Union is an acceptable outcome for the negotiations between London and Brussels.
European Bargaining Intensifies. Between May 23 and 26, voters in every member of the European Union will elect their representatives in the European Parliament — and the likely outcome is a fragmented legislature where the two largest center-right and center-left parties have to negotiate with formerly smaller parties to pass legislation.
Iran Contingency Planning. The coming days should give us a better sense of how much of an appetite the White House and certain Gulf partners actually have for a military confrontation with Iran.
Another Surgical Sanctions Strike by the United States? U.S. Energy Secretary Rick Perry visited Ukraine on May 21 and gave the strongest indication yet that the United States was serious about sanctioning Nord Stream 2, the Russian undersea natural gas pipeline to Germany that would bypass Poland, Ukraine and the Baltics as transit states.
Watching for a North Korean Missile Test. With the White House consumed by Iran and escalating trade tensions with China, North Korea is still struggling to sustain U.S. attention.
Gridlock in Washington. A blow-up this week between President Trump and Democratic congressional leaders over Trump’s ultimatum to end all investigations against him, resulting in the usually politically cautious House Speaker Nancy Pelosi to even raise the impeachment threat, is now threatening to fundamentally derail the U.S. legislative agenda up to 2020.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S. releases.
Briefing.com
Last Weeks Numbers
Review Last weeks numbers here.
Earnings
Aggregate Estimates and Revisions
- First quarter earnings are expected to increase 1.5% from 18Q1. Excluding the energy sector, the earnings growth estimate is 2.9%.
- Of the 483 companies in the S&P 500 that have reported earnings to date for 19Q1, 75.2% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four quarter average of 76%.
- 19Q1 revenue is expected to increase 5.6% from 18Q1. Excluding the energy sector, the growth estimate is 6.2%.
- 57.1% of companies have reported 19Q1 revenue above analyst expectations. This compares to a long-term average of 60% and prior four quarter average of 67%.
- For 19Q2, there have been 60 negative EPS preannouncements issued by S&P 500 corporations compared to 20 positive, which results in an N/P ratio of 3.0 for the S&P 500.
- The forward four-quarter (19Q2 –20Q1) P/E ratio for the S&P 500 is 16.4.
- During the week of May 27, nine S&P 500 companies are expected to report earnings.
Thomson Reuters I/B/E/S data from Refinitiv
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