The C-suite struck an optimistic tone on earnings calls last week. While almost every management team mentioned macroeconomic uncertainty, most executives (outside of the energy sector) were pleased with business conditions. They were even positive on the environment in China. But it's a little hard to believe that everything is business as usual.
The first full week of earnings season is always filled with reports from the nation's banks. Banks typically give the best read on the economy of any industry and for now they sound relatively upbeat. Outside of energy, credit has remained strong and management teams are optimistic about prospects for loan growth. Still, there's reason to be skeptical.
Some Interesting datapoints from this week's C-Suite Speaks: MSC, an industrial distributor, said that weakness is more than just inventory destocking. Two small steel companies protested China dumping steel on global markets, and Carmax saw an uptick in chargeoffs on auto loans.
Last week the first batch of retailers reported weak earnings, but the group was primarily composed of apparel and department stores, which may just be fighting industry headwinds. This week we heard from retailers in other categories and the commentary was better, though still mixed. Overall the consumer looks healthy on paper but doesn't seem too excited about spending money.
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