Despite a bad year overall, stock markets rallied recently, with the S&P 500 up 8 percent over the past month, and the NASDAQ up 11 percent over the same period.
He explained that due to “high cost of capital” and a 38-year high level of inventories, companies can expect poor earnings results in Q3 and Q4.Stock Market Rally? With inventories up, Oakley claimed that companies are going to experience poor earnings. “Wall Street loves to hold the earnings high until you get to the bottom and then they cave,” he explained. “That could be a year from now. The point is, they still have earnings of the S&P up 10 percent this year. And we don’t think there is any way that can happen from this point forward.”However, Oakley was not entirely pessimistic. He suggested that “somewhere in the next 6 to 12 months” would present a “great buying opportunity” in stocks, as prices tumble.