Currently the number of US companies that have reported sales above estimates are at a mere 44.1% based on results released for the first quarter, thus far. The current quarterly revenue beat rate is the third lowest in over 10 years, beaten only by the fourth quarter of 2008 and the first quarter of 2009, just as the recession was beginning.
We believe that the actual data, whether it relate to the broad economy, to actual negative currency impacts, or to earnings, fail to catch up to expectations, a correction in forecasts may be in order, the result of which would likely lead to a correction of stock prices as well.
Again, we see more evidence in increasing metrics for investors to brace themselves for a 6% to 10% pullback in major global equities markets, and surely also for the US markets.