The chart below (Chart 1) caused a lot of stir last Friday – across asset classes, primarily in the U.S., and elsewhere. The U.S. economy only added 38,000 non-farm jobs in May, much weaker than expected and the lowest monthly … Continued
The price-to-earnings ratio is probably the most commonly used tool in equity valuation. Within that, all too often, forward earnings are used. Trailing earnings are seldom employed. In and of itself, in a normal cycle, there is nothing wrong with … Continued
Is the S&P 500 index (2035.94) resting or struggling at resistance? Either way, the rather lethargic action the past few sessions is not completely out of the ordinary given the move it has had off February 11th lows. From low … Continued
Last year, with the bull market in its seventh year, a June 19th post sought to find out where several valuation metrics stood. The conclusion was that they were in uncharted territory. With three more quarters of data since, a … Continued
U.S. corporate earnings have been in serious deceleration. This is no news. They have been decelerating for a while now. Operating earnings of S&P 500 companies peaked at $29.60 in 3Q14, and have declined for five straight quarters annually. Chart … Continued
The S&P just published operating earnings estimates for S&P 500 companies for 2017, and it is an eye-catcher. Depending on one’s bias, reaction can range from ‘yee-haw’ to ‘not again’. The consensus expects a whopping $141.11. To put things into … Continued
One of the hallmarks of the current U.S. recovery has been a lack of wage gains. Corporations have become the price setters, and employees the price takers. It is not that U.S. corporates are not making money. Profits adjusted for … Continued
Growth in U.S. corporate profits with inventory valuation and capital consumption adjustments dipped into the negative territory in 3Q15 – both quarter-over-quarter and year-over-year. At a seasonally adjusted annual rate of $2.06 trillion, they compared with $2.08 trillion in 2Q15 … Continued
The price to sales ratio is an important valuation tool that many investors swear by. The market cap to GDP ratio – essentially a ratio of price to sales – supposedly is a favorite indicator of Warren Buffet. On this … Continued
U.S. corporations have had their share of blame as relates to capital expenditures, wages, etc., but have done a commendable job when it comes to taking advantage of the prevailing low interest-rate environment. Corporate profits have come a long way. … Continued