What Changed? | This Week's Briefing: The tone of earnings season still sounds "fine," but the math underneath is getting tougher. Companies can defend EPS with pricing discipline, buybacks, and cost controls. The catch is that these levers often shift pressure into the cash engine—working capital, maintenance capex, and customer payment behavior. | That's why investors are starting to separate "earnings resilience" from "business resilience." An EPS beat can coexist with weaker cash conversion when receivables stretch, inventories stay sticky, or capex is simply non-discretionary. | | The Lithium Boom | | Did you know it takes 10,000 iPhone batteries worth of lithium to make one EV battery pack? With 350M+ EVs projected to be sold globally by 2030, lithium demand is looking steep. | Current recovery methods involve waiting for liquids to evaporate in ponds the size of 100 football fields. This inefficiency can't keep up with forecasted demand. But EnergyX's technology can recover up to 3X more lithium than traditional methods. | Investors are taking note. EnergyX has $130M+ of investments from General Motors and others. They even earned a $5M DOE grant. | Now, they're scaling their 100,000-acre Chilean project, which has a potential target annual revenue of $1.1B. | Perfect timing. You can still join 40,000+ people as an early-stage investor today. | *Disclaimer: This is a paid advertisement for EnergyX's Regulation A+ Offering. Please read the offering circular at invest.energyx.com. Under Regulation A+, a company has the ability to change its share price by up to 20%, without requalifying the offering with the SEC. | | The Numbers | The S&P 500 blended earnings growth rate for Q4 2025 is 8.2%, early in reporting season. 79% of early reporters beat EPS estimates, but the average beat magnitude (5.8%) is below longer-run averages. The blended S&P 500 net profit margin for Q4 2025 is 12.8%, down from 13.1% in Q3 but above the 5-year average (12.1%). BEA reports corporate profits from current production rose $175.6B in Q3 2025; the quarterly profits measure is revised up 4.5% in Q3 2025. In the Fed's October 2025 SLOOS, banks report (on balance) tighter standards for commercial and industrial loans; in one table cut, 6.2% report "tightened somewhat" for C&I credit standards over the prior three months.
| | Why It Matters | When rates stay restrictive, cash becomes a competitive advantage—not just a financing detail. The firms that look "steady" on EPS but lean harder on working-capital financing are quietly paying more for that steadiness, either through higher interest expense, more conservative bank terms, or both. | This shows up in three places investors should keep on a short leash. First, receivables: a small deterioration in days-sales-outstanding can soak up cash fast, especially for companies with thin buffers. Second, "capex-to-maintain" versus "capex-to-grow": management teams can postpone growth projects, but they can't indefinitely defer spend needed to keep capacity, compliance, and systems running. Third, margin defense: holding margins near cycle highs can require higher promo intensity, expedited logistics, or supplier concessions that don't always translate into cash. | The practical implication is that quality is less about who beats, and more about how they beat. Earnings built on durable demand and clean cash conversion typically age better than earnings built on timing, balance-sheet stretch, or underinvestment. | | Want to get the most out of ChatGPT? | | ChatGPT is a superpower if you know how to use it correctly. | Discover how HubSpot's guide to AI can elevate both your productivity and creativity to get more things done. | Learn to automate tasks, enhance decision-making, and foster innovation with the power of AI. | Download the free guide | | Takeaway | The market is still rewarding stability, but it is increasingly pricing the cost of that stability. In this tape, "show me the cash" isn't a slogan—it's a filter for whether resilience is real, or just financed. | — Lauren
Editor, American Ledger | Resources | FactSet, January 2026
https://insight.factset.com/sp-500-earnings-season-update-january-16-2025 | FactSet, January 2026
https://www.factset.com/earningsinsight | U.S. Bureau of Economic Analysis, January 2026
https://www.bea.gov/data/income-saving/corporate-profits | U.S. Bureau of Economic Analysis, January 2026
https://www.bea.gov/news/2026/gross-domestic-product-3rd-quarter-2025-updated-estimate-gdp-industry-and-corporate | Federal Reserve, November 2025
https://www.federalreserve.gov/data/sloos/sloos-202510.htm |
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