Corporate Profits

Also referred to as “corporate earnings” and “company earnings:” 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.

The Problem With Reality in 2014

By Monday, July 28, 2014

U.S. Economy Halfway to a Recession AlreadyEarlier this month, Jeremy Siegal, a well-known “bull” on CNBC, took to the airwaves to predict the Dow Jones Industrial Average would go beyond 18,000 by the end of this year. Acknowledging overpriced valuations on the key stock indices are being ignored, he argued historical valuations should be taken with a grain of salt and n… Read More

And They Say the Economy Is Getting Better?

By Wednesday, May 14, 2014

Four Largest World Economies Slowdown ModeThe Chinese economy had been growing at about 10% a year, like clockwork, for years. Now, China is in the midst of an economic slowdown, with growth expected to come in this year at 30%–50% below China’s five-year average growth rate.

Why is China’s economy growing so slowly, and why does it matter to us here in North America?

Manu… Read More

Important Message Retailers Are Sending Us About the Economy

By Thursday, March 6, 2014

Consumer Spending Hits Trouble TerritoryConsumer spending in the U.S. economy is highly correlated to consumer confidence. If consumers are worried about the economy, they pull back on their spending.

The Conference Board Consumer Confidence Index decreased by 1.63% in February from January. (Source: Conference Board, February 25, 2014.) And we see the corresponding … Read More

Why I Fell Asleep Last Night During the State of the Union

By Wednesday, January 29, 2014

The Borrower of Last ResortLast night started out like every other State of the Union address I’ve seen…

The President told us all the good stuff about the U.S. economy, like how American corporate profits are at a record high, how the stock market is at record highs, how millions of new jobs have been created since the Credit Crisis of 2008, how the housing mar… Read More

Has the Stock Market Discounted Full Tapering by the Fed?

By Wednesday, January 29, 2014

Stock Market Discounted Full Tapering by the FedWell, here we are with only a few days left for Ben Bernanke in his role as chairman of the Federal Reserve, which has also been aptly dubbed as America’s “money printing press.”

In his final meeting as the head of the most powerful central bank in the world, all eyes will be on Bernanke and whether he decides to initiate his second tr… Read More