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Some bullets

As Stock Prices Continue To Rise, Earnings Continue To Decline by Lawrence Fuller 2013-02-10

? As Stock Prices Continue To Rise, Earnings Continue To Decline BY Lawrence Fuller 130210
? Wall Street continues to report that fourth-quarter earnings releases are beating expectations, with some 68% of companies exceeding estimates. This makes for an alluring headline. Regardless of what expectations were, or what they are today, earnings are declining as stock prices are rising. That is all that is relevant.
? The reason for the decline in earnings, despite the surge in revenues, is that margins continue to erode.
? When accounting for $162 billion in tax increases that is sapping consumer spending power, and the inevitable spending cuts and additional tax increases that will result from sequestration, it is hard not to imagine earnings declining from current levels, much less increasing.
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To somewhat corroborate or at least correlate with your linked essay, Bill DeShurko, in an article on suggests that the divergence between HYG and SPY may be a signal that stocks could break lower soon. He is waiting to see whether HYG turns up or whether SPY turns down to determine the meaning of the uncharacteristic divergence.

I created my own 1-year chart to assess his comments, at the following link:

You can see that HYG and SPY do appear to move in the same direction, with some lag.

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