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Thread: You cannot ignore economic reality.

  1. #691


    Say it ain`t so Joe. The last sentence in this article is pretty scary.

    Then again dreams are often much better than reality. Only problem is you have to wake up sometime.

    Corporate profitability set to weaken - JPMorgan
    Published Feb 26, 2024 05:04AM ET

    Corporate profitability set to weaken - JPMorgan© Reuters - The benchmark S&P 500 index closed at a record high on Wall Street Friday, but sentiment could quickly turn as corporate profit margins appear to be peaking, according to analysts at JPMorgan.

    Equities appear to be in demand because investors expect corporate profits to accelerate, supported by the bottoming out in activity indicators that is now in progress, analysts at the U.S. bank noted.

    “However, the earnings reality might turn out to be the opposite as we move through the year. In aggregate, corporate profit margins are elevated in a historical context, and appear to be peaking out,” according to JPMorgan, in a note dated Feb. 26.

    The bank sees a number of reasons why profit margins could fall from current levels.

    Firstly, many companies locked in low cost of financing through extending the duration of their debt, while the rise in interest rates resulted in an improving return on their cash balances. This development is set to normalize.

    Secondly, toplines were exceptionally strong post COVID for many corporations, and pricing power was high. As nominal GDP growth rates fade, margins could weaken.

    Finally, the bank noted that 2024 EPS projections keep coming down in key regions. For the S&P 500 all the profit growth in the past few quarters was due to Magnificent 7 - Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), Amazon (NASDAQ:AMZN), Tesla (NASDAQ:TSLA), Alphabet (NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META).

    Away from these stocks, EPS growth for the remaining S&P 500 constituents is outright negative.

    Corporate profitability set to weaken - JPMorgan

  2. #692


    Quote Originally Posted by brutus2 View Post
    Wow, I keep forgetting about home prices. Guess it is because the market is virtually frozen.

    Check out a staggering graph at just past 5 minutes into this vid.

    Real Estate is 30 to 40 % over valued on an affordability index.

    Wow, if the powers to be cannot keep all the balls juggling in the air, forever, then we are in for some first class hurt.

    Prices and what you get for them seem to be insane. My daughter and her fiance just bought thee quarter million dollar house outside of Dallas. The pics on looked nice... large house, big lot, etc. Since I hadn't seen the reality I was taken aback when she sent me pictures of the work they were doing inside. Wow. Not a disaster by any means but for 3/4 of a million dollars you would think a lot of delayed maintenance and repairs would have been done to get it ready to market but none had been done.

  3. #693


    Get ready for the next big thing!

    Wendy's will "test" market surge pricing, that means the price you pay will depend upon time of the day.

    What to guess how soon McD's and the rest of the bunch join in? Home Depot and Lowes too? Maybe your bank will have higher fees, but only in the few hours they are open?

    Anyone beside me ever read Catch 22?
    American Legion Preamble:

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