The Stock Market Is More Expensive Than Usual, Q1 Earnings Growth Is Now Projected To Be The Lowest Since Q3 2012

Not only are stock prices near all-time highs, they’re also getting more expensive.

And by expensive, we mean price-earnings ratios are getting high.

This is because stocks are rising faster than earnings are expected to grow.

Currently, the price-to-forecasted earnings ratio of the S&P 500 is 15.2, notes FactSet’s John Butters.

“This P/E ratio is based on Wednesday’s closing price (1862.31) and forward 12-month EPS estimate ($122.62),” said Butters.

…

Read more: http://www.businessinsider.com/chart-forward-pe-ratio-2014-4#ixzz2zBqrUvVn

Q1 Earnings Season Summary: More Than Half Have Missed Revenues

When it comes to Q1 earnings expectations one thing is well known: they are low. Very low. So low in fact that as we showed earlier this week, Q1 earnings growth is now projected to be the lowest since Q3 2012, a dramatic change from EPS expectations at the start of the first quarter when it was optimism, all the way.

http://www.zerohedge.com/news/2014-04-17/more-half-companies-have-missed-sales-estimates-so-far-earnings-season

We Could Be In Trouble If Global Growth Stays This Low For Much Longer

When it comes to the state of the global economy, there’s both good news and bad news to report. On a positive note, Credit Suisse economists forecast that global GDP will increase 3.3 percent this year, an improvement over last year’s 2.9 percent expansion. The bad news? Even at that improved level, growth is merely hovering near the 40-year average of 3.4 percent. Since we’re technically in a recovery, the economy should be growing fasterthan average, and the fact that it isn’t indicates potential GDPis lower than in other recoveries.

Neal Soss, Credit Suisse’s Vice Chairman of Global Fixed Income and Economics Research, says that it’s not unusual to have periods of sluggish growth after a major financial crisis, as governments, businesses, financial institutions, and consumers retrench. The danger arises if that retrenchment phase drags on for too long. At that point, mediocre growth can start to feel more permanent, and businesses will feel a declining incentive to invest in the possibility of expansion. What’s more, the skills of the long-term unemployed can atrophy to the point that they verge on being permanently unemployable. “The downside to an episode of this sort – if that sluggish growth continues – isn’t just the slower growth itself. It’s that the potential of the economy will deteriorate,” he says.

Read more: http://www.thefinancialist.com/global-gdp-living-down-to-its-potential/#ixzz2zBrSDMeL

If The Smart Money Is Selling, Who’s Buying?

Based on Bloomberg’s Smart Money Flow indicator, there is a very significant amount of distribution going on… the question is just who is soaking up the smart money selling? Company buybacks, Johnny 5, or a greater-fool retail investor?

 

 [3]

 

Perhaps this chart from Lance Roberts at STA Wealth provides some color for who?

 [4]

http://www.zerohedge.com/print/487450

Google testing dual support…that NEEDS to hold!

CLICK ON CHART TO ENLARGE

Google has created a quality rising channel and it broke above this channel last year and now is about to test it as support. As the same time a steep support line is coming into play, creating dual support.

Support is support until broken.

If support should not hold here, it would send a heck of a message to the tech sector! Stay tuned here!!!

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http://blog.kimblechartingsolutions.com/2014/04/google-testing-dual-support-that-needs-to-hold/

 

 

 

Headlines:

1. China faces wave of company defaults
2. Korean Company Risk of Distress Dwarfs Japan, AlixPartners Says
3. Staple shortage in Venezuela hits 60.2% in March
4. EU price rises slow, widening deflation threat
5. Italian Banks Seen Selling About $69 Billion of Bad Loans
6. Rising China defaults turn investors off bad debt factory Cinda
7. Japan Downgrades Assessment of Economy
8. Venezuela Raises Iron Hand Against Protesters
9. China: 20% of our arable land is polluted
10. Yellen says jobs remain too weak to raise rates
11. France Targets Welfare for Big Spending Cuts
12. CalPERS adopts $459 million pension rate hike
13. Borrowing for pension costs soar in NY; up 22% to $472M this year

I think the reason is obvious why the global economic growth is slowing.

Government economic rescue packages have enriched the rich and didn’t do much to help the middle class and the poor. Money is now concentrated in the hands of those who don’t need to buy anything, while those who need to buy things no longer have enough money to buy them.

They helped people who didn’t need help and neglected those who did need help. And such neglect now comes at a cost.

Once you increase economic inequality beyond a certain point, then it continues to increase on its own. Because decreased consumer spending leads to deflation, which enriches the rich by increasing the value of their money and impoverishes the poor by reducing employment and other economic opportunities for them.

NIck1

Saxplayer