Posted on 08/09/2010 8:15:21 AM PDT by TigerLikesRooster
Weak Sales Pose Threat to Recovery in Stocks
Monday, August 9, 2010 08:26 AM
Weak revenue growth, which corporate America managed to mask in the second quarter by holding costs at unsustainably low levels, stands as the biggest threat to a recovery in U.S. stocks.
Many of the largest U.S. companies sailed past Wall Street's expectations, their profit boosted by last year's brutal cost-cutting campaigns. Companies laid off tens of thousands of workers, sent remaining staffers out on unpaid leave and halted contributions to employee retirement accounts.
Their top-line performance, though, was less stellar.
Shares of blue chip companies, including JPMorgan Chase & Co., General Electric Co. and McDonald's Corp. sold off despite better-than-forecast earnings on investor concern they face weak demand in the quarters ahead.
(Excerpt) Read more at moneynews.com ...
P!
Guess companies now are realizing that laying off people and exporting American jobs has reduced their spendable income.
“...unexpected...”
Actually, the actions you criticized enabled the companies to continue. Continuing with excess employees and unprofitable operations reduces cash and destroys income.
could there be “stimulus” money being dumped into the market to keep it from crashing??
Yep, the companies will continue, revenues will go down, more cutting labor costs, more revenues go down -- repeat - until companies go out of business and socialism happens.
Basing your economy on people buying stuff, while making sure they don’t have the means to do so (i.e. Jobs) will have this effect.
Oh contraire, Pierre. Stocks will go up.
Thank you protectionism and thank you unions for making the super-efficient, highly paid American worker obsolete. At some point, we can and will regain this, but only if we get rid of the notions that you "export jobs." The U.S. has ALWAYS "exported jobs," esp. if you consider that the largest U.S. plant in the WORLD in the mid 1800s was the Singer Sewing Machine plant . . . in IRELAND!
Was the Singer Plant before or after the potato famine?
Now now Equality 7-2522, we know looking into the Uncharted Forrest is forbidden.
Back to our sweeping.
Americans have always had high-skill jobs because of the availability of land. That means that businesses are continually trying to dump workers because they are expensive, and substituted machines. This has been going on since Whitney and Colt and Slater and Lowell. This is why the U.S. has always been the exact opposite of low-wage Europe which has "protected" its jobs. We innovated, they trailed.
Now, that certainly does not mean that it's good that American companies are laying people off. It may well mean that American LAWS and REGULATIONS are so punative that they make it impossible for American companies to innovate. But laying unproductive workers off is the key to success, not failure. You only fail when you lay off productive, efficient workers.
So why the shouldn’t people expect the government to provide jobs if none are available in cost efficient [profit maximizing] industry? Hungry people are fodder for democrats, crime and revolution [read growth of socialism and communism].
Seriously? If business “doesn’t provide” jobs it’s government’s duty? Business has ONE purpose. To make a profit. It is that dynamic that has always led to the greatest economic explosions in human history. ANY time you try to insist that business do anything OTHER than make a profit, you destroy jobs.
And guess what? How many US jobs are courtesy of Non-US firms.
So if we get into a “jobs war”, guess who will end up losing? It won’t be “them.”
GIANT Honda plant up the road that provides the ONLY car-making jobs in the region now, until you get down to the TOYOTA plant down toward Cincy. These are non-union plants. Wonder if the idiot UAW ever thought about what would happen to its members when it held up GM and Chrysler for a fortune in bennies?
Sorry. American companies should give priority to American citizens. If they want to be citizens on the world and maximize profits with the cheapest labor they can find anywhere, then American workers will consider government as an alternate supplier of jobs. Business wants to own all the jobs and require workers to limbo lower than the lowest in the world. Without a social concern for this country, they invite alternatives. They should balance patriotic interests and profit interests.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.