On April 8, 2016, FactSet earnings insight report for the S&P 500 estimates 1Q16 earnings to decline by 9.1%. If this holds true, this will be first time since 3Q09 that the index will see four consecutive quarters of year-over-year declines in earnings. The chart below shows the estimated earnings growth and the actual growth from 2Q13 to 4Q15. Clearly,…
I have opined in the past that expansionary monetary policies will do little for China and the economy needs gradual transformation from largely investment and production oriented economy to an increasingly consumption based economy. The chart of the day shows investment as a percentage of GDP for China, Asian Tigers and the United States of America. Clearly, China’s investment as…
In several of my recent articles, I have discussed global economic indicators that point to meaningful slowdown in the world economy. I wrote today on the GDPNow indicator that estimates US GDP growth for 1Q16 at 0.1%. While China’s PMI has improved in March 2016, it is too early to conclude that the country is on the path to sustainable…
The equity markets trending higher is a function of several factors and some of the major factors includes GDP growth trend, corporate earnings trend, inflation, geo-political factors and the liquidity factor. Since the financial crisis of 2008-09, the fundamental factor of liquidity has played an important role is supporting asset markets globally and it includes equities. This article discusses if…
According to the GDPNow indicator from the Federal Reserve Bank of Atlanta, US GDP growth for 1Q16 is estimated at 0.1%. If this holds true, the economy has witnessed a sharp slowdown in March 2016 as is evident from the GDPNow estimate chart below.     It is important to mention here that in the last four quarters, the average…
There is little doubt that the United States Of America is in an inescapable debt trap. While I am not suggestion any gloom and doom scenario in the foreseeable future, the US dollar is likely to trend lower and the government is likely to try and inflate its way out of the debt trap. Unfortuantely, that has never worked in…
One of the major points discussed after the financial crisis of 2008-09 was the asset concentration in the banking system in the United States. However, little has been done on that front with the “too big to fail” in 2007 becoming “too bigger to fail” by 2015.     In the near-term, I don’t see any major crisis or liquidity…
The Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline is a natural gas pipeline, expected to transport natural gas from Turkmenistan to Afghanistan, Pakistan, and India.     This article was first published by the Asian Development Bank (www.adb.org)
    Guest Article From Frank Holmes, CEO Of U.S. Global Investors   Last week I shared with you the Commerce Departments’ news that fourth-quarter corporate profits, while still at record highs, sank at their fastest pace since the same period in 2008. As I said then, that’s no reason to panic. You might have read elsewhere that close to…
I am of the opinion that the S&P 500 index is likely to decline by at least 10% to 15% in the coming months. In my view, this decline is likely to come sooner than later. I therefore advise caution and investors who are sitting on gains can consider some profit booking. In the recent past, I have discussed several…