The SPDR S&P 500 (NYSE:SPY) officially entered bear market territory this week after falling more than 20% from the highs. As analysts begin to revise earnings estimates for the coming quarters, one investor says sentiment has become too negative.
What Happened "Shark Tank" investor and O'Shares ETFs chairman Kevin O'Leary sent a message to the bears Wednesday on CNBC's "Fast Money Halftime Report."
"You're all wrong," O'Leary said. "This is a more productive, higher gross margin economy, and nobody wants to give it any credit."
Over the last three years, technological advancements have allowed businesses to deliver more of their products direct-to-consumer, which dramatically enhances margins, he said, adding that Nike Inc (NYSE:NKE) is a great example.
"During the pandemic, they went from 38% direct-to-consumer to over half, 55% direct-to-consumer, at an 80% gross margin," O'Leary said. "You're not giving them any credit for that? What about all of the other companies?"
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Why It Matters: By the fourth quarter, O'Leary expects a resurgence in earnings numbers.
"What's going to happen is we are going to have fantastic earnings, much better than what are being brought down right now, in Q4," he said.
Everyone seems to be talking about a recession, but O'Leary doesn't see any signs of such, he said.
"Show me where this recession is. Show me in the employment numbers. Show me in the sales numbers of private companies. Show me, where is this recession?"
SPY Price Action: The SPDR S&P 500 was up 0.84% at $377.01 at press time, according to data from Benzinga Pro.
Photo: Ontario Chamber of Commerce from Flickr.
