Bumped up by monetary stimulus markets are looking very nervous as a host of poor earnings and weakening guidance hits each stock as it reports. The depth of the declines for an increasing number of companies in response to earnings statements is significant. As fiscal issues start to impact the economy going forward, one has to be concerned over the potential impact this will have.
Mcdonalds, Google, General Electric, Dupont, Microsoft, Caterpillar, Texas Instruments, 3M and others have hit the proverbial cliff in response to recent results. If this keeps on going you would expect to see further significant declines.
A big question is how much current guidance has factored in the risk of a varying degrees of the upcoming fiscal cliff to slope.
Weakening guidance is bad for investment, bad for employment, bad for wage increases and bad for overall confidence in the economy. Those close to the ground are becoming increasingly worried.