I don't know if you really want to call it a warning, but the American Express CEO, Kenneth Chenault said that analysts estimates of 20-25% earnings growth was is "too aggressive". Instead, Chenault said that a target of target of 12- 15% was more realistic. That sounds about right since most credit card companies charge loan sharking fees to customers that amount to 18%. When you back out expenses, 12-15% sounds about right.

WALL STREET'S ESTIMATES ARE TOO HIGH

I've said it before and I'll say it again, earnings estimates are coming down, and they should continue decline in 2006.

Yesterday, Target (TGT) lowered its November outlook, which does not bode well for the Christmas selling season. Higher commodity and raw material prices are beginning to take a bite out of the earnings power of companies who do not raise their prices for fear of lower sales. Companies who do not pass on the increase costs eventually eat the difference which in turn reduces their margins.

Retailers like Best Buy (BBY) and Wal-Mart (WMT) also sold off on Targets news. Best Buy was the hardest hit after dropping 5 points (to $43.89) from its November 7th high of $48.95. BBY shares are up +.62 so far today at $44.51.

Wal-Mart (WMT) made an interesting comment a few weeks ago when they said they were going to be squeezing their suppliers for lower prices extra hard this year. This tells me that is higher costs, and inflation are hurting WMT as well, but they are going to try and make up for it by squeezing the companies they do business with. The key word here is TRY.

Let's assume WMT is successful in squeezing their suppliers. Most of Wal-Marts suppliers are publicly traded companies. If their margins are squeezed, they will have to lower earnings and revenue estimates as well. So, around and around we go, who will warn next, nobody knows.