The US economy is collapsing at a pace not seen since 2008-2009.
Retail sales are showing outright deflation, declining at a pace not seen outside of contractions.
The retail sector is not the only sector showing pronounced weakness.
General Electric (GE), JP Morgan (JPM), Microsoft (MSFT), IBM (IBM), Citigroup (C), Johnson & Johnson (JNJ), Intel (INTC), Coke (KO), Oracle (ORCL), Honeywell (HON), Goldman Sachs (GS), and American Express (AXP) have all reported a decline in Year Over Year sales for the second quarter of 2015.
These companies are not unusual in this regard. Across the board S&P 500 companies have posted a 4% drop in revenues.
The damage is heaviest in the commodity sector, particularly energy, but growth is anemic with the exception of healthcare (which is being boosted by the increase in costs due to Obamacare). Excluding healthcare, the largest growth is a mere 2.4%… and that is being concentrated due to a few key players.
This marks the second quarter of Year Over Year declines in revenues: something that has not occurred since the last recession in 2009.
H/T Charlie Bibello
Moreover, even earnings (which CAN be massaged to overstate growth) are showing signs of weakness.
Profit growth for the S&P 500 companies is at its weakest point since 2009. That’s because, in fact, there isn’t any profit growth.
S&P 500 earnings for the first half of the year are expected to show a 0.7% contraction compared to a year ago, according to numbers from FactSet research. Growth in the first quarter was a meager 1.1%, but the second quarter is more than offsetting that, expected to contract at a 2.2% rate, FactSet estimates. The last time the S&P 500 saw a year-over-year decline for the first half of a year was 2009, when earnings positively cratered at the depths of the global recession, down 30.9%.
Source: Wall Street Journal
The above hard data runs completely counter to the uptick in GDP growth shown by Fed’s models. These items STRONGLY suggest the US is approaching if not already in a recession.
Stocks are completely misunderstanding this. And by the time they “get it” the markets will be a in a free-fall.
Smart investors are preparing now, BEFORE it hits.
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Best Regards
Phoenix Capital Research
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