GDP-3rd ESTIMATE: ECONOMY GREW AT 1.4% (Bloomberg)
“The U.S. economy grew in the fourth quarter at a faster
pace than previously estimated, supported by stronger household spending that’s
helping cushion the expansion from weakness overseas.” Story at…
http://www.bloomberg.com/news/articles/2016-03-25/u-s-economy-grew-1-4-in-fourth-quarter-supported-by-consumers
My cmt: The previous estimate was 1% growth. Per-capita
growth was only 0.5%. For a discussion of “real” GDP (on a per-capita basis) see…
http://www.advisorperspectives.com/dshort/updates/Real-GDP-Per-Capita
PROFITS RECESSION (Briefing.com)
“…the BEA…released fourth quarter corporate profits data
for the first time. The news there wasn't good. Profits after tax with
inventory valuation and capital consumption adjustments declined 8.4% on top of
a 1.7% decline in the third quarter, so it can be said there is an earnings
recession in the U.S. even if the economy itself isn't in a recession.” Commentary
at…
https://www.briefing.com/Investor/Calendars/Economic/Releases/gdp.htm
EARNINGS (FACTSET)
“For Q1 2016, the estimated earnings decline is -8.7%. If
the index reports a decline in earnings for Q1, it will mark the first time the
index has seen four consecutive quarters of year-over-year declines in earnings
since Q4 2008 through Q3 2009… the percentage of companies issuing negative EPS
guidance to date for the first quarter is 78% (93 out of 119). This percentage
is above the 5-year average of 73%....”
VALUATION (FACTSET)
“Forward P/E Ratio is 16.4, above the 10-Year Average
(14.2)” Earnings Insight available from FACTSET at…
http://www.factset.com/websitefiles/PDFs/earningsinsight/earningsinsight_3.24.16/view
One of the charts in the FACTSET report showed that
earnings fell 2% when the S&P 500 was rebounding up 10% in price. One must
wonder whether the S&P 500 will be able to hold its current lofty level
with earnings in such dire straits. “Money
for Nothin’?”
Happy Easter...
...But, our thoughts go to the people of Brussels.
