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Investors say stocks are facing brutal earnings season with all eyes on Apple

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(Bloomberg) — Investors expect this earnings season to lead to a further slump in stocks and will see Apple in particular as a leader in global economic conditions.

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More than 60% of the 724 respondents to the latest MLIV Pulse survey say this earnings season will push the S&P 500 lower. That means there is no end in sight to the bad flow of stocks, after Friday’s plunge decisively dashed hopes that the striking two-day rally early last week would be the start of something bigger. About half of the survey respondents also expect stock valuations to fall further than the average for the past decade.

The results underscore Wall Street’s concerns that even after this year’s brutal sell-off, stocks have yet to identify all the risks from violent central bank tightening as inflation continues to rise. The outlook is not likely to improve any time soon as the Fed continues to raise interest rates, likely to impact growth and earnings in the process. Friday’s data showed that the US labor market remains strong, increasing the chances of a massive Federal Reserve interest rate hike next month.

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“Third-quarter earnings are going to be disappointing, with downside risks clear to analysts’ estimates for the fourth quarter,” said Peter Garnery, head of equity strategy at Saxo Bank A/S. “The main risks to third-quarter earnings are the cost-of-living crisis affecting consumer demand” and wage hikes affecting corporate earnings.

Earnings season in the US begins in earnest this week with results from major banks, including JPMorgan Chase & Co. and Citigroup Inc. Which is set to give investors a chance to hear from some of America’s most influential corporate leaders.

Watch Apple

As for the stocks to watch in the next few weeks, 60% of survey respondents see Apple as important. The iPhone maker, which has the most weight on the S&P 500, will provide insight into a range of key topics, such as consumer demand, supply chains, the impact of a higher dollar and higher rates. The company reports on October 27. JPMorgan got the second-largest signal, at 25%, but Microsoft Corp and Walmart Inc. She also got a large number of votes.

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The reporting stretch began with the S&P 500 down 24% this year, at the pace of its worst performance since the Great Financial Crisis. Against this bleak background, nearly 40% of survey respondents tend to invest more in value stocks, compared to 23% for growth, where earnings expectations are at risk when interest rates rise. However, 37% did not choose either of these categories, perhaps reflecting Citigroup’s quantitative strategists’ view that stock markets have “got definitively defensive” and are just beginning to reverse recession risks.

US stocks have had a bad year, but they also have other financial assets, from Treasuries to corporate bonds to cryptocurrencies. The 60/40 balanced portfolio that mixes stocks and bonds in an effort to hedge against strong market moves either way has lost more than 20% so far this year.

Inflation fears

Survey respondents expect that references to inflation and stagnation will dominate earnings calls this season. Only 11% of respondents said they expected CEOs to utter the word “confidence,” underlining the bleak background.

“I expect further negative and cautious guidance based on broad economic weakness, uncertainty and tighter monetary policy,” said James Athey, abrdn’s chief investment officer.

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About half of those surveyed see stock valuations deteriorate further in the next few months. Of those, about 70% expect the S&P 500 price-earnings ratio to fall to a 2020 low of 14, while a quarter sees it dip to a 2008 low of 10. The index is currently trading about 16 times forward earnings, Below is the average for the last decade.

Rough look

Wall Street has a similarly bleak view. Citigroup strategists expect a 5% contraction in global profits for 2023, in line with below-trend global economic growth and high inflation. The Bank’s Earnings Review Index shows that ratings cuts outweigh the upgrades for the US, Europe and the world, with the US seeing the deepest rating cuts. Bank of America Corp strategists expect a 20% drop in European earnings per share by mid-2023, while peers at Goldman Sachs Group Inc. Asian stocks excluding Japan could see further profit cuts amid weak economic and industrial data.

With all this pessimism, there is room for positive surprises ahead. A win for lower earnings expectations is likely in third-quarter reports, according to Bloomberg Intelligence strategists. Meanwhile, at Barclays plc, strategists led by Emmanuel Kao said the results were not likely to be a “disaster” partly due to higher nominal growth, but doubted the outlook would be constructive.

“Earnings estimates for 2023 are starting to fall but there is more to go down. As estimates drop, it will be a necessary part of creating a lasting bottom in stock markets,” said Madison Faller, global strategist at JPMorgan Private Bank. Investors are keen to engage more in anticipation of a possible pause in the Fed’s lifting cycle.”

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Join us on October 11 at 10 a.m. New York time for a discussion of the survey results with Amy Kong, chief investment officer at Barrett Asset Management, and Kim Forrest, founder and chief investment officer at Bokeh Capital Partners.

To subscribe to MLIV Pulse Stories, click here. For more market analysis, check out the MLIV blog.

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© Bloomberg LP 2022

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Starwood Property Trust announces dividend of $0.48

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Starwood Property Trust announces dividend of $0.48

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Nick Bollettieri, tennis coach, 1931-2022

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After young Andre Agassi wins an important match while wearing jeans, make-up and earrings, his coach Nick Bollettieri summons him to appear in front of 200 classmates at his tennis academy. As punishment for “defiling” the Center of Excellence, Agassi was sentenced to flush all of the toilets on site. In the next tournament, his coach threatened him that he would have to play in a skirt.

Few people can claim to have produced more champions than “The Michelangelo of Tennis”. Agassi, Jim Courier, Monica Seles, Maria Sharapova and the Williams sisters all trained under pioneering coach Bollettieri, who has died at the age of 91.

In the late 1970s, Politieri pioneered the creation of the Living Academy for young athletes aspiring to achieve greatness. But his methods were as notorious as they were innovative. He would stand bare-chested on the field, berating his young subjects for every stray shot or mis-slashed fist, as they would repeat the same actions thousands of times.

The vision was to bring the best young players together in one place where they could “play, break rackets, gamble, fight, bat”. Students were forbidden to watch television, listen to the radio, eat junk food, or call home during the week. The misdemeanor penalty in court includes forced running without water. But at the end of each practice session, the kids would step in front of their teacher uttering the catchphrase, “Thank you, Nick.”

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In his academic diaries, Agassi described it as “a glorified concentration camp. Not all that glorified.” However, those aiming for the summit continued to pour in there. And despite Pollettieri’s reputation as abrasive and obsessive—he got up every morning at 4:30 a.m. to stretch and lift weights—many of those he taught speak of him affectionately as a surrogate parent. They also became winners. Of the tens of thousands of players who had trained under him, ten would reach the world number one rank.

“I was living my dream,” Sharapova, who joined the academy at the age of eight, said. he told the Financial Times in 2015. “I saw all these great champions come and train. I would wake up every morning and I couldn’t wait for my alarm to go off at 6.30am and go get my lesson.”

Bollettieri and Andre Agassi in 1988 after winning on the field in New York © Caryn Levy / Sports Illustrated / Getty Images

Nicholas James Bollettieri was born in 1931 in Pelham, New York. His parents were Italian immigrants. He was the quarterback on the football team in high school, before his uncle convinced him to try out the “sneaky sport of tennis”.

After studying philosophy in college in Alabama, Politieri joined the army, became a paratrooper and reached the rank of lieutenant. His time in the army would be central to his coaching ethos later in life. He said, “I started to learn a lot being a parachutist—the discipline, the feeling that you’re the best in the world, that you can do anything.”

After leaving the military in 1957, he enrolled to study law at the University of Miami. To help make ends meet, he began offering tennis lessons at $1.50 an hour, despite having no experience as a coach and no more than that as a player. Less than a year later, he gave up his studies to devote himself to tennis.

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“A lot of coaches know tennis a lot more than I do,” he said. “What I do know is how to work with you as a person.”

In 1961, he discovered Brian Gottfried, who was then nine years old, on the field and took him under his wing. Gottfried would later become Bollettieri’s first hit, reaching No. 3 in the world in 1977.

That same year, after a stint teaching wealthy hotel clients to play tennis, he landed at Colony Beach & Tennis Resort near Sarasota, Florida. A year later, he founded the Nick Bollettieri Tennis Academy.

He went on to borrow $1 million to transform his 40-acre tomato plants in Bradenton, Florida, into a sprawling tennis training camp that opened in 1981. Agassi referred to his time there as “a forehand master of the flies,” but he attended for free. His father only had money to pay for three months’ tuition, but Bollettieri called him to say he was “tearing up the check” after seeing how good he was. The pair suffered an emotional split in 1993, shortly after Agassi won the first of his eight Grand Slam titles.

Bollettieri was known for his money management problems. With financial problems looming, he sold the Academy to IMG in 1987. But he continued to run it.

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Today the site covers approximately 600 acres, and teaches a wide range of sports to the 1,200 full-time residents and thousands more children and adults who attend sports camps there. In 2014, Politieri was inducted into the Tennis Hall of Fame, one of only four coaches to receive the award.

Josh Noble

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Ads disappear as Google Ad Manager crashes for a while

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Netizens watched an ad-free web for several hours Thursday night.

8:04 p.m. EST, The Google Spread It was “investigating reports of a problem with Google Ad Manager”. While users can enter the program, they “see error messages, high response time, and/or other unexpected behavior.”

Most importantly, ads were not displayed, which means that users did not see ads on the websites of companies using Google Ad Manager. “Ads Manager is not serving ads to affected users,” Google wrote in the incident report.

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A few hours later, at 10:40 PM EST, Google said That the problem has been resolved, writing “Ad display is now restored”.

Google didn’t share any information about the extent of the outage in its post, but users on social media speculated it could be global, with customers in the US, Canada and Japan Report Twitter Ad manager was not working.

Google Ads Manager is a program digital marketplace Where customers can buy and sell ads across multiple networks. The service is mostly used by large publishers who are involved in direct sales to ad buyers. Over 80% of large publishers say they use Google Ad Manager to manage their ad sales.

Other Google advertising services appear to be running. The search giant doesn’t report issues with AdSense or AdMob, its ad services tailored to small websites and mobile developers respectively.

Advertising is a major part of Google’s business. Google earned 54.48 billion dollars From advertising sales in the third quarter of this year’s total revenue of $ 69.09 billion.

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Update, December 9, 2022: This article has been updated with the news that Google has resolved the issue with Google Ad Manager.

The Impact Report’s new weekly newsletter examines how ESG news and trends shape the roles and responsibilities of today’s CEOs. Subscribe here.

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