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Editor's Note: Keith wrote this article before Boeing reported earnings on Oct. 24. The company did, in fact, "blow the doors off" expectations, raising earnings and revenue guidance for the year.
I've been as steadfast as I've been consistent.
The "dead cat bounce" others claimed would turn into a more substantial rally two weeks ago was nothing more than a head fake. "There's still more downside ahead," a comment I repeated Oct. 22 during an appearance on Varney & Co.
You almost never hear about that from Wall Street.
But you should, especially this time around…
You see, this earnings season is NOT about the numbers. Contrary to what most people will believe, it's the commentary that will make or break your bank account.
We've known this was coming for weeks – months, actually – so we're well prepared. Sadly, though, millions of investors have gotten caught flatfooted with each new leg down.
The Dow dropped 500 points early on Oct. 23, following disappointing earnings from Caterpillar Inc. (NYSE: CAT) and 3M Co. (NYSE:MMM). It's also the fifth straight week of declines, and puts the major indices down at least 5.8%, as I type (on Oct. 23).
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Caterpillar led the bear-brawl by noting that manufacturing costs were higher because of higher material and freight costs, which is what most people were bracing for. What they – the big traders – had not counted on, though, was the accompanying narrative that material costs were directly driven higher by rising prices and, of course, tariffs.
3M's numbers were pretty straightforward and much the same story… lower quarterly earnings and revenue expectations. Here, the bogeyman was lowered sales growth.
From there, it was a short hop, skip, and a jump to bank shares and tech stocks as the selling accelerated.
There are three key takeaways:
About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.