Ericsson and Siemens Show Cracks in the Market; Profit Confidential Probes Further

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According to popular financial newsletter Profit Confidential, the stock market has experienced a 20%-plus rise since October, spearheaded by blue-chip names. The strong move up may not last for long, according to Michael Lombardi, lead contributor to Profit Confidential.

ericsson and siemens show cracks in the market

Ericsson and Siemens Show Cracks in the Market

With consumer demand flat on its back in both the U.S. and Europe, it is difficult to see where the rise in consumer demand is going to come from.

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According to popular financial newsletter Profit Confidential, the stock market has experienced a 20%-plus rise since October, spearheaded by blue-chip names. The strong move up may not last for long, according to Michael Lombardi, lead contributor to Profit Confidential.

“Now it’s the blue-chip leaders in the stock market warning of slow growth,” says Lombardi.

As reported by Profit Confidential, many companies have been reporting their fourth-quarter numbers with their earnings outlook for 2012. Among them, LM Ericsson Telephone Company, the world’s largest maker of equipment for mobile phone networks, surprised the market with a 50% drop in quarterly profit, according to the financial newsletter.

“These results were even worse than anticipated, with its 2012 earnings outlook very weak,” says Lombardi.

A recent Profit Confidential article cited that Siemens AG, Europe’s blue-chip engineering group, also reported weak earnings and a tepid earnings outlook, as delays in orders impacted revenue and profits. Siemens warned that Europe is facing a mild recession, according to Profit Confidential.

Lombardi was surprised not so much by the trouble from Europe, but by the fact that orders from China slowed 17% in the quarter. This was a “source of growth Siemens was banking on,” according to Lombardi.

Lombardi expects earnings outlook reports from the major eurozone blue-chip companies to be very negative in the weeks and months ahead.

“With consumer demand flat on its back in both the U.S. and Europe, it is difficult to see where the rise in consumer demand is going to come from,” says Lombardi.

Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market... before it plunged.

Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.

To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.

Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.

Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.

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