Yesterday, I said I didn’t feel good about the stock market and I was “in all cash”. I gave macro-economic/government policy reasons, but left out that in my view the current relatively strong earnings of public companies reflected more on cutting costs and reducing investment than on actually doing anything long term to make more money. In other words, earnings are up but for how long and at what price?
Here is a little data along those lines, courtesy EconomicPicData, that confirms my view:
In summary… expect earnings to be under pressure in the not too distant future unless there is surprise outsized rebound in the economy.
Yep. I concur. Eventually, you’ve cut to the bone. Eventually, as I’ve found, you notice bad service at restaurants and decide to just say home.