TJM Investments' Timothy Anderson: The Story Of Lower Earnings Guidance Is 'Not Getting A Lot Of Attention Yet'

The following is a note from TJM Investments' Timothy Anderson.

The story of lower earnings guidance is starting to take hold quicker than many have expected, and it’s not getting a lot of attention yet.

This morning's recap discussed the likelihood of Big Global CIOs shifting some equity allocations from US to Europe:

In the US we've just finished 3 rounds of QE over the last 5 to 6 years. GDP growth hit what will likely be a high water mark of +5 percent in 3Q 2014 and although estimates are for +3 percent to +4 percent for 2015, earnings estimates for 2015 are being reduced a bit from where they were 3 to 6 months ago.

It’s a near certainty that the Euro will continue to weaken and the $$US will continue to appreciate. I know that’s a redundancy, but as a point of emphasis I thought it was worth mention twice.

It would not be surprising to see some equity funds flows from US markets to the Eurozone as their stimulus initiatives take hold. If you’re the CIO at a multinational equity fund, your asset allocation equation doesn’t require a PhD.

Buy Eurozone equities and lighten up a bit in the US.

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