Posted on 04/25/2017 12:42:19 PM PDT by John W
Investors can thank earnings, as much as they can anything else, for the Dow Jones Industrial Average’s rally over the last couple of weeks.
The surge this week in the Dow DJIA, +1.20% which is on track Tuesday to post the first back-to-back 200+-point gains since the two days following the U.S. election, is being attributed by many to the reduced risk of euro dissolution in the wake of French election results and hopes for corporate tax cuts and a budget deal. But there is a lot more to it than that.
Since April 13, when J.P. Morgan Chase & Co. JPM, +1.02% kicked off first-quarter earnings reporting season before the market opened, 15 of the Dow’s 30 components have reported results through Tuesday morning, with 11 beating earnings expectations, according to FactSet. That 73% beat rate is above the 5-year average of 68% for S&P 500 index SPX, +0.70% companies, FactSet said.
(Excerpt) Read more at marketwatch.com ...
There are several factors but UNDERestimation of earnings is certainly one. CAT, whose sales have struggled the last few quarters and is up $8, was estimated @.61 and came in $1.28.
Fake earnings estimates!
Much of earnings growth is coming from squeezing payroll and benefits.
Lies. Lies. Lies.
It explains a fair amount.
In spite of the poor press, a stock market that is regulated like the Dow Jones is a good repository of value. It is not paper value, like government bonds, that the government can easily manipulate or repudiate.
Unlike gold, it is very liquid and portable. It is easy to access from most places in the world.
It is portions of real companies that earn real profits.
Of course, value can be diminished or destroyed by disasters, the same as can real estate. It is not as easily used to pay for small purchases in barter, such as ammunition or cigarettes.
But actually try to buy something with a gold coin. In spite of fictional accounts, you will find it far more difficult than fiction writers claim.
Gold has been money for over 3000 years. After the SHTF you can use your fiat money as tinder to start fires.
Always annoyed by the media attributing a shift in the market to a specific event. A recent report said the markets were up on expectations that Le Pen would lose the election to Macron. It could just as easily been said that it was on the expectation of Macron losing to Le Pen or of loss of the election by establishment candidates. Perhaps it was due to reports that Bruce Jenner has had his chopadickoffame?
Bruce Jenner is a woman.
I will use my ammunition for trade goods.
Gold may come back as a currency after a time.
But it will take time for people to get used to using it again.
Take an ounce of gold to a gun show, and see if you can trade it for a gun and ammunition.
It was an eye opener for me.
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