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Follow on Google News | Stock Market Will Rise in the Immediate Term, as Pessimism Prevails and Earnings Don’t DisappointPopular Financial e-letter Profit Confidential Predicts Stock Market Will Rise in the Immediate Term, as Pessimism Prevails and Earnings Don’t Disappoint
According to Profit Confidential, “We’ve been writing that, while corporate earnings would slow down from their torrid pace of 2009 and 2010, earnings would not plummet as many ‘Johnny come lately recession-predicting analysts’ had forecast this summer. Bellwether General Electric Co. (NYSE/GE) reported that it made $3.4 billion in its latest quarter, up 11% from the same period in 2010. Microsoft Corporation (NYSE/MSFT) easily beat analyst expectations, as net income for the company rose 6.1% in its latest quarter to $5.74 billion.” Profit Confidential says that the corporate earnings of GE are telling us that the business segment of the economy is not growing like it did in 2009 and 2010, but the earnings are still growing. Microsoft’s earnings are saying that both consumers and businesses are still spending, albeit at a slower pace. And earnings at the world’s biggest restaurant chain, McDonald’s Corp. (NYSE/MCD), which experienced an 8.6% increase in third-quarter profit, can be interpreted to read that the low-end consumer market is still spending, just at a slower pace. Michael Lombardi, a lead contributor to Profit Confidential, writes, “Corporate earnings from large businesses like GE, Microsoft and McDonald’s are key economic indicators in themselves. Respective earnings growth of 11%, 6.1%, and 8.6% are telling us that growth is still there, but it’s not at the 18% earnings growth pace that the S&P 500 was running at just a few months ago. On a backdrop of stable corporate earnings growth, the stock market has few present competitors in respect to other investment alternatives. ‘Real estate’ is still a dirty word for many investors. The paltry returns of U.S. Treasuries present anemic alternatives to the stock market at present. Hence why we believe the stock market will head higher for now.” 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 www.profitconfidential.com. Profit Confidential is Lombardi Publishing Corporation’ End
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