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n1 writes:

ZeroHedge reports:

In a world in which everything is up if only one excludes all the things that are down, a favorite pastime of "strategists" has become announcing how high S&P500 earnings would be if only one excluded energy companies... and the impact of the dollar... and China's economic slowdown... and the Emerging Markets currency crisis... and the [cold|hot|just right] weather... and rising labor costs... and everything else that stands between revenue (non-GAAP of course, just ask Tesla) and the bottom line.

What if one does the inverse: what if instead of eliminating the worst performing sectors (and all other factors that detract from performance in a priced to centrally-planned perfection world) one eliminates the biggest company in the world, Apple?

The result is troubling. [...] When it comes to second quarter earnings, Apple made all the difference in the world, literally, between gains and losses for what was otherwise one of the "best" performing sectors. In fact, AAPL provided a whopping 6% swing in IT sector EPS for Q2, pushing them from down 1.5% Y/Y without AAPL to +4.4% with AAPL.

The article goes on to show that in Q3 of 2015, the sectors earnings are expected to go down 0.4% with AAPL included. Without Apple earnings in the sector are to decline a quite significant 5.9%. It will apparently only gets worse from there, ZeroHedge continues.

So while Q3 tech EPS with AAPL could be a nailbiting toss up, with the final number potentially even ending in the green, in the fourth and final quarter of 2015 - the quarter when supposedly the Fed will have hiked - all bets are off and the Info Tech sector, even with AAPL, will post its biggest EPS decline in over two years.

Does this report tally with the feelings on the ground in the industry and water-cooler talk, or is this purely a financial markets issue?

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