|SPX (Photo credit: wigu)|
That's a 90 percent negative run rate that many investors and analysts have never seen before.
“Although guidance tends to be downbeat, this is especially negative,” wrote Goldman’s David Kostin, in a note to clients over the weekend. The strategist sees this negativity leading to a 14 percent drop in the S&P 500 this quarter.
Monday, Caterpillar [CAT 85.08 1.22 (+1.45%) ] was the latest company to issue a negative forecast for this quarter, along with 2013, with the CEO citing all this uncertainty and a build in inventories.
(Read More: Caterpillar Guidance ‘Flat-Out Wrong,’ Weiss Says)
“Companies are taking the opportunity to lower the bar,” said Mike Murphy of Rosecliff Capital. “All have one eye on the fiscal cliff, so might as well bring expectations down in case we go over the cliff.”
The most discussed topic on earnings conference calls is in fact the year-end “fiscal cliff,” when the Bush tax cuts are set to expire and mandatory spending cuts go into effect, barring any action from a lame-duck Congress. Executives fear this may occur whether or not President Barack Obama retains office orMitt Romney unseats him.
(Read More: Goldman Set for Gains, but Mind That ‘Cliff’)