{"id":12336,"date":"2015-09-14T04:15:32","date_gmt":"2015-09-14T08:15:32","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=12336"},"modified":"2015-09-14T04:15:32","modified_gmt":"2015-09-14T08:15:32","slug":"not-much-wrong-with-the-us-economy","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2015\/09\/14\/not-much-wrong-with-the-us-economy\/","title":{"rendered":"Not much wrong with the US economy"},"content":{"rendered":"<p>Profit margins in the US are contracting, with the second quarter showing a 6.0% decine in profit per unit of real gross value added (Nonfinancial). Contraction of greater than 10% would be cause for concern, but we need to dig a little deeper.<\/p>\n<p><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" title=\"Declining US Profit Per Unit of Real Gross Value Added (Nonfinancial)\" height=\"363\" width=\"525\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2015\/2015-09-14-profitmargins.png?resize=525%2C363&#038;ssl=1\" alt=\"Declining US Profit Per Unit of Real Gross Value Added (Nonfinancial)\" \/><\/p>\n<p>Earnings per share for the S&amp;P 500 Index declined for the last two quarters and is projected to decline for the next two quarters as well (Q2 which is 98.6% complete and Q3 2015). <\/p>\n<p><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" title=\"S&amp;P 500 Earnings Per Share\" height=\"381\" width=\"525\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2015\/2015-09-14-spx-eps.png?resize=525%2C381&#038;ssl=1\" alt=\"S&amp;P 500 Earnings Per Share\" \/><\/p>\n<p>The sharp fall in index earnings is primarily caused by losses in the Energy sector. Other sectors are reasonably healthy. <\/p>\n<p><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" title=\"S&amp;P 500 Energy Sector - Earnings Per Share\" height=\"381\" width=\"525\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2015\/2015-09-14-energy-eps.png?resize=525%2C381&#038;ssl=1\" alt=\"S&amp;P 500 Energy Sector - Earnings Per Share\" \/><\/p>\n<p>Another cause for concern is bellwether transport stock Fedex. Commencement of a primary down-trend normally warns that economic activity is contracting. <a href=\"http:\/\/247wallst.com\/services\/2015\/06\/17\/how-fedex-earnings-are-being-held-back\/\">Freight revenue for the fiscal fourth quarter<\/a> increased by only 1%, while ground revenue increased by 19%. Slower earnings growth due to a <a href=\"http:\/\/www.fool.com\/investing\/general\/2015\/06\/17\/fedex-earnings-fall-just-shy-of-expectations.aspx\">lag in fuel surcharges<\/a> and integration challenges with the acquisition of TNT may both be weighing on the stock.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" title=\"Fedex\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2015\/2015-09-14-fdx.png?w=525&#038;ssl=1\" alt=\"Fedex\" \/><\/p>\n<p>The Freight Transportation Services Index, however, has turned upwards.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" title=\"Freight Transportation Services Index\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2015\/2015-09-14-freight.png?w=525&#038;ssl=1\" alt=\"Freight Transportation Services Index\" \/><\/p>\n<p>And the LoDI Index continues to climb.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" title=\"LoDI Index\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2015\/2015-09-14-lodi.png?w=525&#038;ssl=1\" alt=\"LoDI Index\" \/><\/p>\n<blockquote style=\"background-color:#889999;\"><p>The LoDI Index uses linear regression analysis to combine cargo volume data from rail, barge, air, and truck transit, along with various economic factors. The resulting indicator is designed to predict upcoming changes in the level of logistics and distribution activity in the US and is represented by a value between 1 and 100. An index at or above 50 represents a healthy level of activity in the industry.<\/p><\/blockquote>\n<p>Spending on durables remains promising, with light motor vehicle sales rising.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" title=\"Light Motor Vehicle Sales\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2015\/2015-09-14-lightvehicles.png?w=525&#038;ssl=1\" alt=\"Light Motor Vehicle Sales\" \/><\/p>\n<p>And construction spending (adjusted for core CPI) climbing steeply.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" title=\"Construction Spending\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2015\/2015-09-14-housing.png?w=525&#038;ssl=1\" alt=\"Construction Spending\" \/><\/p>\n<p>The ISM Manufacturing PMI Composite Index remains above 50, indicating expansion, but is softer than it has been for a while.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" title=\"ISM Manufacturing: PMI Composite Index\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2015\/2015-09-14-pmi.png?w=525&#038;ssl=1\" alt=\"ISM Manufacturing: PMI Composite Index\" \/><\/p>\n<p>The Leading Index from the Philadelphia Fed, however, at a healthy 1.57%, continues to project a healthy economic outlook.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" title=\"Philadelphia Fed Leading Index\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2015\/2015-09-14-leading.png?w=525&#038;ssl=1\" alt=\"Philadelphia Fed Leading Index\" \/><\/p>\n<p>Despite the falling Fedex stock price and softer PMI, there does not appear to be much wrong with the US economy. The positives outweigh the negatives. Analysts&#8217; optimism about an fourth quarter upturn may be a little premature, but does not appear far off-track.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Profit margins in the US are contracting, with the second quarter showing a 6.0% decine in profit per unit of real gross value added (Nonfinancial). Contraction of greater than 10% would be cause for concern, but we need to dig a little deeper. Earnings per share for the S&amp;P 500 Index declined for the last &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2015\/09\/14\/not-much-wrong-with-the-us-economy\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Not much wrong with the US economy&#8221;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,34],"tags":[793,1362,1472,2076,2108,2136,2683,2790,3011,3012],"class_list":["post-12336","post","type-post","status-publish","format-standard","hentry","category-economy","category-us-canada-countries-regions","tag-construction-spending","tag-fedex","tag-freight-transportation-services-index","tag-leading-index","tag-light-motor-vehicle-sales","tag-lodi-index","tag-pmi-composite-index","tag-profit-per-unit-of-real-gross-value-added","tag-sp-500-earnings-per-share","tag-sp-500-energy-sector"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Not much wrong with the US economy - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Not much wrong with the US economy - the patient investor\" \/>\n<meta property=\"og:description\" content=\"Profit margins in the US are contracting, with the second quarter showing a 6.0% decine in profit per unit of real gross value added (Nonfinancial). 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Should this persist, it may mark the end of the earnings recession. It looks likely that Hillary Clinton will win the presidency while the House remains in GOP hands. Equity markets face near-term pressures, but the economic and\u2026","rel":"","context":"In &quot;Stock Markets&quot;","block_context":{"text":"Stock Markets","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/stock-markets\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":12874,"url":"https:\/\/thepatientinvestor.com\/index.php\/2016\/02\/22\/sp-500-still-flaky\/","url_meta":{"origin":12336,"position":1},"title":"S&#038;P 500 still flaky","author":"ColinTwiggs","date":"February 22, 2016","format":false,"excerpt":"From Howard Silverblatt at S&P Indices: \"With almost 90% of the Q4 2015 earnings reported, 67.6% of the issues are beating estimates (the historical rate is two-thirds), but only 36.8% beat As Reported GAAP rule based earnings estimates and less than half, 46.8%, beat sales estimates. Explained \u2018responsibility\u2019 for any\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"S&P 500 EPS","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2016\/2016-02-22-spx-eps.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2016\/2016-02-22-spx-eps.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2016\/2016-02-22-spx-eps.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":14585,"url":"https:\/\/thepatientinvestor.com\/index.php\/2016\/11\/25\/priming-the-pump\/","url_meta":{"origin":12336,"position":2},"title":"Priming the Pump","author":"ColinTwiggs","date":"November 25, 2016","format":false,"excerpt":"US stocks are buoyant on hopes that a Donald Trump presidency will benefit business, with major indexes flagging a bull market. But promises come first, the costs come later. While I support a broad infrastructure program and the creation of a level playing field in global markets, the actual execution\u2026","rel":"","context":"In &quot;Investment &amp; Infrastructure&quot;","block_context":{"text":"Investment &amp; Infrastructure","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/investment-infrastructure\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":9580,"url":"https:\/\/thepatientinvestor.com\/index.php\/2014\/03\/27\/is-the-sp-500-overvalued\/","url_meta":{"origin":12336,"position":3},"title":"Is the S&#038;P 500 overvalued?","author":"ColinTwiggs","date":"March 27, 2014","format":false,"excerpt":"The daily press appears convinced the S&P 500 is overvalued and due for a crash. Yet the macro-economic and volatility filters that we use at Porter Capital and Research & Investment \u2014 to identify market risk so that we can move to cash when risks are elevated \u2014 show no\u2026","rel":"","context":"In &quot;Earnings &amp; Dividends&quot;","block_context":{"text":"Earnings &amp; Dividends","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/investing\/earnings-dividends\/"},"img":{"alt_text":"S&P 500 Price-Earnings ratio","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2014\/spx-peratio.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2014\/spx-peratio.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2014\/spx-peratio.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":16204,"url":"https:\/\/thepatientinvestor.com\/index.php\/2018\/04\/26\/life-left-in-us-stocks\/","url_meta":{"origin":12336,"position":4},"title":"Life left in US stocks","author":"Colin Twiggs","date":"April 26, 2018","format":false,"excerpt":"According to market pundits, the latest stock sell-off was fueled by concerns over rising bond yields and slowing growth for Caterpillar (CAT). From CNBC: ....Caterpillar shares reversed lower during the call, when Chief Financial Officer Brad Halverson said first-quarter adjusted profits per share will be the highest for the year\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4981,"url":"https:\/\/thepatientinvestor.com\/index.php\/2012\/07\/30\/corporate-profit-streak-faces-a-threat-wsj-com\/","url_meta":{"origin":12336,"position":5},"title":"Corporate Profit Streak Faces a Threat &#8211; WSJ.com","author":"Colin Twiggs","date":"July 30, 2012","format":false,"excerpt":"KATE LINEBAUGH: In the third quarter, earnings by companies in the S&P 500 are expected to shrink for the first time since just after the recession ended, according to Thomson Reuters, which surveys Wall Street analysts.....declining by about 0.4% from the year-earlier quarter.....That follows what will likely have been three\u2026","rel":"","context":"In &quot;US &amp; Canada&quot;","block_context":{"text":"US &amp; Canada","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/us-canada-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/12336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=12336"}],"version-history":[{"count":0,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/12336\/revisions"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=12336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=12336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=12336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}