Corporate earnings are also referred to as “company earnings” and “corporate profits:” basically, the amount of money a company makes in certain period of time. The price/earnings multiple is still the most common tool used to value a company. The stock market values a company based on the amount of money—the earnings and profits—the company has after all expenses, including taxes, have been paid. In a stock market where stocks are traded at an average of 12 times earnings, a company making $1.00 a share per year would be valued at $12.00. All things being equal, the more money a public company makes, the higher its stock price.
Corporate Earnings was last modified: September 6th, 2013 by admin
By deciding on Thursday not to raise interest rates, the Federal Reserve gave the world the wrong message.
How I interpreted the Fed’s lack of courage to act yesterday: “After keeping interest rates at zero for seven years, and having printed trillions of dollars in new currency out of thin air, the U.S. economy is still so weak, we .
For the second quarter of 2015, companies in key stock indices like the S&P 500 reported a decline of 0.7% in their corporate earnings. This was the first decline in profits since the third quarter of 2012.
But what was more alarming was that revenues for the S&P 500 companies plunged 3.4% in the second quarter. For two consecutive.
The downside momentum in the U.S. stock market is gaining traction. And unless the Federal Reserve does a complete about-face and launches QE4, the sell-off in stocks that started in mid-May of this year will accelerate.
Today, I present three very strong arguments for lower stock prices.
First, looking at the chart below, you will see.
Early this year, I started writing about how falling copper prices were a leading indicator of trouble in the global economy. Since then, we’ve all come to know about the economic slowdown in China. But the further collapse in copper prices over the past three months could be warning of something much bigger than just a slowdown ahead..
No matter how you look at it, the U.S. stock market is a dangerous place to be right now.
In the chart below of the Dow Jones Industrial Average, pay attention to the circled area.
Chart Courtesy of www.StockCharts.com
Of importance to note, the Dow Jones Industrial Average now trades well below its 50-day moving average and its 200-day .
Immediate term outlook:
The bear market rally in stocks that started in March 2009, extended because of unprecedented central bank money printing, is coming to an end. Gold bullion is up $1,000 an ounce since we first recommended it in 2002 and we are still bullish on the physical metal.
Short-to-medium term outlook:
World economies are entering their slowest growth period since 2009. The Chinese economy grew last year at its slowest pace in 24 years. Japan is in recession. The eurozone is in depression. With almost half the S&P 500 companies deriving revenue outside the U.S., slower world economic growth will negatively impact revenue and earnings growth of American companies. Domestically, America’s gross domestic product grew by only a meager 2.3% in the second quarter, which will negatively impact an already overpriced equity market.