Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

The Bear Market Is Still Going

Published 01/23/2019, 02:23 PM
Updated 07/09/2023, 06:31 AM

The economy is slowing and corporate profits have peaked.

Rather than looking at highly massaged government data, let’s take a look at how companies, whose job it is to maximize their returns, are faring.

EIn the last month, Apple (NASDAQ:AAPL), Samsung (LON:0593q), LG, FedEx (NYSE:FDX), Johnson & Johnson (NYSE:JNJ), Nautilus, Tesla (NASDAQ:TSLA), Tailored Brands (NYSE:TLRD), Signet Jewelers (NYSE:SIG), Delta (NYSE:DAL), Skyworks (NASDAQ:SWKS), Macy’s (NYSE:M), Kohl’s (NYSE:KSS) and American Airlines (NASDAQ:AAL) have all lowered forward guidance.

So you’ve got airlines, big tech, healthcare and consumer discretionary companies ALL suggesting that the economy is not faring as well as the data suggests. This is not an isolated issue. The economy is contracting.

On top of this, corporate margins have peaked. Take a look at the last four quarters. The trend is obvious.

Corporate Margins

So against this backdrop of economic weakness and declining corporate profit margins, stocks are supposedly entering a new bull market and will make a run to new all-time highs?

The odds of this are less than 5%. And when you throw in the fact that the Fed is still tightening and has yet to slow the pace of its balance sheet reduction, it’s outright IMPOSSIBLE.


Stocks And The Fed's Balance Sheet

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.