Following a period of protracted decline in economic activity, a recovery occurs when business activity is increasing. This is viewed primarily with increases in Gross Domestic Product (GDP) and employment levels. As businesses increase their sales and are more confident about future activity, they hire more people. The new hires are more confident about their future and spend a portion of their income on business, and the cycle continues. The stock market usually leads an economic recovery, because stock investors look to the future. If investors see an economic recovery 12 months from now, they will start to accumulate shares in companies that will benefit.
Look at any newspaper or watch any financial news channel and you will hear someone saying the U.S. economy is growing. To prove their point, they will refer to gross domestic product (GDP) figures and unemployment data.
Yes, the GDP numbers and the unemployment picture do look better, but our economy is still in very big trouble.… Read More
U.S. Retail Sales Contract, Inventory Growth Stellar?
Very soon we’re going to hear the earnings news straight from the horse’s mouth. Quarterly earnings are beginning to trickle in and even if you aren’t interested in the stocks that you don’t own, corporate reporting is the most important market intelligence you can review.
For years, Paychex, Inc. (PAYX) was one of those companies that continually reported great financial results…. Read More
A good gauge for me on how consumers in the U.S. economy are faring has always been the statistics coming out of Wal-Mart.
Wal-Mart Stores Inc. (NYSE/WMT) reported its operating income in its second quarter (ended July 31, 2014) declined by 2.4%. Its subsidiary, Sam’s Club (wholesale store), saw its operating income, after taking out fuel, decline by 10.2%…. Read More
Stocks are going to gyrate around second-quarter earnings, but that’s exactly what this market needs—the corporate bottom line and expectations for the rest of the year.
With so many stocks trading at their all-time record-highs, I view investment risk in equities as being high at this time.
This is actually a tough environment in which to be an investor looking for new positions…. Read More
By no surprise to me whatsoever, the government’s third and final estimate of first-quarter U.S. gross domestic product (GDP) came in at a negative annual pace of 2.9%. (Source: U.S. Bureau of Economic Analysis, June 25, 2014.) The U.S. economy’s growth rate in the first quarter of this year was the worst since 2009.
I’ve been writing since the fall of 2013 that the U.S…. Read More