economic slowdown

Global Economy: If Only China Was the Biggest Problem

By Wednesday, September 2, 2015
Global EconomyFor months, I have written in these pages about how the slowing global economy would wash ashore to America and infect our own companies. I posted repeated charts in Profit Confidential that showed leading indicators like the Baltic Dry Index and copper prices were collapsing, foretelling of poor economic conditions ahead. And wouldn’t you believe some of my own analysts ridiculed me in face of what was once the booming .

Global Economy: Why It Will Get Worse Before It Gets Better

By Friday, August 28, 2015
Global EconomyChina is in deep trouble. Economic activity in the second-biggest economy is plunging and it looks like the situation is only going to get worse. The Caixin Flash China General Manufacturing Purchasing Mangers’ Index (PMI), an indicator of manufacturing activity, now stands at 47.8—the lowest level in more than six years. (Source: Markit Economics, August 21, 2015.) A PMI below 50 means contraction in the manufacturing sector. This year, the .

Global Economy: Here Cometh Deflation

By Friday, August 14, 2015
global economyEarly 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. Commodities Price Plunge Suggests There’s No Growth Below is a chart of .

Global Economy in Sharp Slowdown; U.S. Companies’ Earnings at Risk

By Wednesday, July 22, 2015
Global EconomyNo matter where you look, major economic hubs in the global economy are struggling to show growth. According to the German finance ministry, Germany’s economy grew at only 0.3% in the second quarter of this year after growing a similar amount in the first quarter. (Source: Reuters, July 19, 2015.) Germany is the fourth biggest economy in the world. China, the second biggest economy, saw its gross domestic product (GDP) .

U.S. Inventory Stockpile Up to Size of Canada

By Friday, July 17, 2015
U.S. Consumer SpendingIn June, retail and food service sales in the U.S. economy declined 0.3% from May. When calculating these sales figures, the Census Bureau looks at 13 different kinds of businesses. In June, seven of those business types reported an outright decline in sales. (Source: U.S. Census Bureau, July 14,2015.) In particular, American consumers are pulling back on their spending of discretionary staple items such as furniture and clothing, building material, .

Global Economic Slowdown to Take Stock Market Down with It

By Wednesday, July 15, 2015
Global EconomyThe global economy is headed towards an economic slowdown and it will take U.S. stock prices down with it. The growth rates of major economies are anemic. China is growing at its slowest pace in two decades, putting pressure on Australia’s economy. Japan has been going in and out of recession for years now. The crisis in Greece has strained the eurozone’s economic growth even further. And the U.S. economy .

U.S. Economy; More People on Food Stamps Now Than Entire Population of Spain

By Monday, July 6, 2015
U.S.EconomyAccording to a study by Economic Policy Institute, a nonpartisan think tank, between 2009 and 2014, the salaries of CEOs at the largest U.S. companies increased by 54.3%. (Source: Economic Policy Institute, June 22,2015.) But the average American hasn’t done that well. Between 2009 and 2013, median U.S. household income declined by four percent—from $54,059 to $51,939 in 2013. (Source: Federal Reserve Bank of St. Louis, last accessed June 25, .

Global Economy Headed for Misery; Be Careful if You Own Stocks

By Wednesday, July 1, 2015
global economyTo gauge activity in the global economy, I follow two indicators very closely: how sales at multinational Caterpillar Inc. (NYSE/CAT) are faring; and trade activity in the global economy. Global Economy Indicator #1 The chart below plots the percentage change in three months rolling sales at Caterpillar Inc., a large American company that sells heavy equipment worldwide. As you can see from the chart, since December of 2013, sales at .

Truth Behind So-Called “Recovery” in the U.S. Economy

By Monday, June 15, 2015
U.S. Economy SufferingLast Friday, the U.S. Bureau of Labor Statistics reported that in the month of May, 280,000 jobs were added to the U.S. economy. The unemployment rate was unchanged and stood at 5.5%. (Source: Bureau of Labor Statistics, June 5, 2015.) If you just look at the current unemployment rate, it’s a massive improvement from the 10% unemployment rate seen in the midst of the Great Recession. But here’s what the .

Global Economy: Its Weakness to Impact U.S. Economy and Stock Market

By Wednesday, March 25, 2015
Global economy slowdownWith 20 central banks indicating they may lower interest rates even further, a world economic slowdown underway, and bellwether copper prices collapsing, U.S. multinational companies (and their stock prices) will not escape the malaise facing the global economy. Central Banks Concerned Regarding Global Economic Slowdown? The mainstream media will have you believe central banks across the global economy are slashing their benchmark interest rates. They are right. So far, more .
Sep. 2, 2015
Trailing 12-month EPS for Dow Jones companies (Most Recent Quarter) $1014.15
Trailing 12-month Price/earnings multiple (Most Recent Quarter)

17.44

Dow Jones Industrial Average Dividend Yield 2.71%
10-year U.S. Treasury Yield 2.14%

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.

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From: Michael Lombardi, MBA
Subject: Golden Opportunity for Stock Market Investors

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