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Needless to say, the #Snowmageddon of 2015 was surely a bust – meteorologists apparently took a page out of the econ textbook, with predictions being off by several feet of snow. And while the blizzard was not as bad as many feared, the real “storm” hammering Wall Street has been several surprisingly sour earnings reports.
In just the last few days, several big-name companies announced troubling results for the fourth quarter, and many of which also gave lower forecasts for the upcoming quarter and year:
Earlier in the season, many of the big banks reported worse-than-expected results, including Morgan Stanley (MS ), Bank of America (BAC ), and Citigroup (C ). The lower forward guidance announced by a number of companies is also troubling.
Making matters worse, several large companies have announced significant cuts to their labor force:
While many of these companies are scrambling to cut costs due to the massive slide in oil prices, some of these firms are cutting back for more troubling financial reasons. One trend that has emerged among analysts is that more job cuts are expected in 2015 – banking is just one of the sectors expected to reduce its labor costs.
The disappointing results from several big-name companies combined with the news of job cuts has many investors understandably worried about the outlook for 2015. As we’ve mentioned previously, many factors will come into play this year including corporate performances, diverging global monetary policies, the housing market, a stronger dollar, weak wage growth, and now a red flag for several corners of the labor market. Earnings season, however, is not yet over – we’ll be sure to keep you updated with the latest earnings news as it comes in.
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