Yearly earnings likely to flatter down slightly: Solaris

Tim Ghriskey, CIO, Solaris Asset Management talks about the earnings season is likely to impact the US markets.

Below is the edited transcript of his interview. Q: It has been a fairly muted 2-3 day performance, hasn't it?
A: Yes, we have seen a bit of profit taking here over the last two days. Today we are seeing the markets down about 0.5 percent. The rally we had since early June is a bit long in the tooth. We are going into earnings reporting season here. I call it just ticking it off last night. Yearly earnings overall are expected to be flatter down slightly. That at least has a prospect of causing some more profit taking at short-term in the market here. Q: What is the say of the ability of Quantitative Easing (QE) programmes to continuously boost the markets right? Just a few weeks ago we got smaller version of QE3 nonetheless, the Open Market Transactions (OMT) from the ECB and the salubrious effects of those seem to have lasted very shortly?
A: Yes if you look at the history of the QE programme in the states, each one has had a diminishing impact. We can also say a positive impact on the equity market. So, this latest QE3 programme did cause an extenuation of the rally recently. We have also seen that moderate here. There is more concern about earnings and the impact that QE3 might have on earnings in the near term. QE3 is just one of the stimulus programs which are out there trying to get the US economy invigorated again.