Key stock indices are the main barometers of the market’s health. The key stock indices are the ones that most investors pay attention to when trying to understand where the market stands. For the U.S., the key stock indices include the Dow Jones Industrial Average and the S&P 500. But the key stock indices can also include sub-groups that are crucial to a healthy market, such as the Dow Jones Transportation Index. In every country, there are key stock indices that one can follow to better understand the health of that country’s market.
Key Stock Indices was last modified: September 7th, 2013 by admin
Sure, since the Dow Jones Industrial Average and the S&P 500 both went through their mini-crash in late August, the stock market has rallied back somewhat. But the fact is the market is still down 10% from its 2015 high. And three stock market indicators I follow are warning of an even a bigger market sell-off ahead.
These three indicators.
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.
For years, the correlation between copper prices and the stock market has been a reliable leading indicator of where stock prices are headed.
The chart below plots daily copper prices (brown line), the S&P 500 (green line), and the correlation between the two (black line at the bottom of the chart) going all the way back to 2002. Please.
Two weeks ago, I wrote about how investors are exiting the stock market. That situation has now gotten worse. Investors, especially what is referred to as the “smart money,” are making a beeline for the stock market exit door. From the chart below of the National Association of Active Investment Managers Exposure Index, you can see.
Since the beginning of 2015, I have been warning the stock market would fall hard this year. I was so convinced about it, I produced a video called “The Great Crash of 2015,” which has gone out to millions of people. My “2015 Stock Market Outlook” (which was quite negative) that I posted on YouTube in January of this year has been a .
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.