If a company misses its earnings or revenue estimates, even by just a little, its stock is pummeled. Give less than expected guidance – pummeled.

This has been an unforgiving earnings season. Investors seem to have no patience for disappointment.

In spite of this volatility, the market at large has held up well. There is still strong demand for U.S. equities. The Lonely Bull has been citing strong money flows into several sectors for some time now. There has been some rotation of interest from one sector to another depending upon the news of the moment, but the averages have held up well.

Earning are now only part of the investment backdrop. The hoped-for trade deal with China is back to the forefront of concerns. Part of the impetus for the strong start to the year for stock returns is the belief that a trade deal with China was probable. The other factor was the belief that the Federal Reserve would not continue to raise rates. A China trade deal is now far more uncertain. Interest rates are still low so that at least helps. All this points to increased volatility and even more impatience for perceived poor performance. Sometime ago, the Bull warned to expect a return of volatility and greater uncertainty. He also stated that underlying conditions still point to further gains eventually. Stay steady, my friends.

The Lonely Bull