Don’t get David Einhorn wrong. When he calls the first quarter “strange,” he’s not complaining. I mean, anytime you’re six weeks into a quarter down 10%, like the S&P 500 was, but end up in the black, like the S&P and Greenlight Capital did, you’ll take it—especially when it’s the first quarter since you slammed the door on a year in which you lost 20%. So, yeah, great quarter, woo hoo. It’s just that, when you look at things a little more closely, like David Einhorn has, it’s just not much to inspire a guy, looking back or looking ahead.
“Continuing the game of lower and beat, most companies beat low-balled fourth quarter estimates and many further lowered targets for 2016," Einhorn said...“Each quarter when companies reported, earnings were about 3% higher than expected, with roughly two-thirds of the companies exceeding estimates. Impressively, there were 32 companies in the S&P 500 that earned less last year than was expected at the beginning of the year, and reduced expectations for 2016, while somehow managing to report positive surprises every quarter in 2015….”
“2016 looks to be more of the same. Since the beginning of the year, bottom-up consensus estimates for S&P 500 earnings have fallen from $126 to succeed at clearing a continually falling bar.”