They are worried about the uncertainties in the U.S. economy and the global economy—exports, a recession-infested eurozone, a slowing China, and the U.S. federal government’s budget plans.
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New York, NY (PRWEB) December 09, 2012
In a recent Profit Confidential article, lead contributor and financial expert Michael Lombardi reports that of the 468 S&P 500 companies that have reported their third-quarter corporate earnings so far, 71% have reported corporate earnings above what the markets were expecting, but only 40% of them beat the revenue expectations. He notes that the overall earnings for the third quarter for S&P 500 companies are down -0.2%. (Source: FactSet, November 16, 2012.) According to the Profit Confidential expert, while mainstream stock advisors suggest the S&P 500 is going to break an all-time high, the S&P 500 and other key stock indices are missing the most basic ingredients that drive the markets to the upside: corporate earnings and business confidence.
In the article “More Reason to Be Bearish on the Stock Market…,” Lombardi notes that in addition to corporate earnings being dismal, businesses are also planning to scale back on spending and delay projects.
“They are worried about the uncertainties in the U.S. economy and the global economy—exports, a recession-infested eurozone, a slowing China, and the U.S. federal government’s budget plans,” states Lombardi.
He notes that business investments in equipment and software, a key indicator gauging the economic activity of corporate America, slowed down for the first time since early 2009 in the third quarter of 2012. (Source: The Wall Street Journal, November 18, 2012.)
According to the Profit Confidential expert, looking forward, corporate earnings pictures aren’t likely to improve, as S&P 500 companies are expecting their fourth-quarter corporate earnings growth to be worse than third-quarter earnings growth.”
“The market cannot run forever on artificially low interest rates, record government spending, and record money printing, just like a car can’t run on air,” concludes Lombardi. “In the end, all stock markets rise or fall based on the corporate earnings growth of the companies that trade in the market.”
Lombardi simply doesn’t see 2013 being a better year for corporate earnings growth in the U.S. than 2012.
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.