Stocks are already overvalued by 100% by every historically accurate valuation model used over the last 100 years. The S&P 500 EPS dropped by 3.7% last quarter versus the previous year. Their actual earnings dropped by more than 5%. These mega-corps have been buying their stock back at a record rate, even though the market is at all-time highs, reducing the number of shares and artificially boosting EPS. It’s good for their Executive bonuses, don’t you know.
The Atlanta Fed is already estimating only a 1.2% GDP in the first quarter of 2015. It will be negative when everything is said and done. Manufacturing new orders have declined for 6 consecutive months. This only happens just prior to a recession or during a recession. Take your pick.
One of the major reasons manufacturing is faltering, besides the global recession, EU disintegrating, Japan blowing itself up, and China’s real estate boom going bust, is the tremendous appreciation of the USD. Companies selling US made goods in foreign countries see the price of their goods rise, as the dollar appreciates. It has appreciated 20% in the last 8 months against the basket of all foreign currencies, and now sits at an 11 year high. It is now 33% higher than the 2008 lows.
Continue reading “S&P 500 EARNINGS COLLAPSE”
