Figures for American companies are declining
FactSet data shows that less than 1 percent of companies in the US S&P 500 outperformed expectations last quarter. These results are well below the average of the past five years of 8.6 percent and the average of the past 10 years of 6.4 percent.
“If the index actually has to report a decline in earnings for the fourth quarter of 2022, it will do so again for the first time since the third quarter of 2020,” he said. John Butters of FactSet.
In conversation with CoinDesk TV Wave Financial’s David Siemer said the market is currently sending mixed signals. “The US job market is strong, but companies’ quarterly earnings are disappointing. I still expect a recession before 2023, but not a strong one,” said Siemer.
Wait a minute
According to Siemer, we will have to wait a while for the final effects of the US Federal Reserve’s rate hikes. From March 2022 through today, the central bank raised interest rates by a total of 4.50 percent. It will take a while before we see the effects of this in an economy.
However, the interest rate was around zero for almost 10 years, which an economy gets used to over time. Now it suddenly has to work with an interest rate that is many times higher, which means that there is a chance that both companies and individuals will run into problems over time.
It is possible that a lot of parties can survive with an interest rate of around 0 percent, but that they can no longer do so with an interest rate of 4.50 percent or higher. Should a recession actually come, it could be very difficult for Bitcoin and the rest of the market.