Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19
The Exponential Stocks Bull Market Explained - Video - 13th Mar 19
TSP Recession Indicator - Criss-Cross, Flip-Flop and Remembering 1966 - 13th Mar 19
Stock Investors Beware The Signs Of Recession / Deflation - 13th Mar 19
Is the Stock Market Still in a Bear Market? - 13th Mar 19
Stock Market Trend Analysis 2019 - 13th Mar 19
Gold Up-to-Date' COT Report: A Maddening Déjà Vu - 12th Mar 19
Save Fintech? Ban Short Selling. It's Not That Simple - 12th Mar 19
Palladium Blowup Could Expose Scam of Gold & Silver Futures - 12th Mar 19
Next Recession: Concentrating Future Losses & Bringing Them Forward In Time As Profits - 12th Mar 19
The Shift of the Philippine Peso Regime - 12th Mar 19
Theresa May BrExit Back Stab Deal Counting Down to Resignation, Tory Leadership Election - 12th Mar 19
Phase 1 of Stock Market Correction - 11th Mar 19
Long Awaited Stock Market Pullback has Finally Arrived - 11th Mar 19
US Presidential Cycle and the Stock Market - Video - 11th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - 11th Mar 19
Chinese Economic Data Shakes the Global Stock Markets - 11th Mar 19
The Fed Is Playing a Dangerous Game - 11th Mar 19
The Stock Market Has Called the Fed’s Bluff, What’s Next? - 11th Mar 19
Turkey Holiday Bazaar Extreme Jewelry Price Haggling - Fethiye Market - 11th Mar 19
Are You Ready for the Next Big Move in Gold? - 10th Mar 19
Taylor Wimpey Reports £811m in Profits boosted by Help-to-Buy - 10th Mar 19
SPX Big US Stocks Fundamentals - 10th Mar 19
Yield Curve Inversion and the Stock Market 2019 - Video - 9th Mar 19
Various Stock Market Indicators are Plunging. Run for the Hills! - 9th Mar 19
Unsecured Debt hits £15,400 per UK Household - 9th Mar 19
QE4EVER Stock Market 2019 - 8th Mar 19
The Real New Deal - 8th Mar 19
How High Cost Credit Affects Financially Unstable Families - 8th Mar 19
Gold and Silver Precious Metals Pot Pourri - 8th Mar 19
Stock Market Downward Reversal? Stocks Still Relatively Close to Their Recent Highs - 8th Mar 19
Gold and the Political Theater: Is The Tail Wagging the Dog? - 8th Mar 19
Is Recession Near? - 8th Mar 19
Consumer Behavior: What you need to know to read your Audience - 8th Mar 19
The Exponential Stocks Bull Market - 7th Mar 19
Millennial Home Buyers Not as Active as Boomers Were in US Property Market - 7th Mar 19
KIND Elevates Nut Butter Category with a Wholesome Recipe - 7th Mar 19
Brexit Does Not Stop Bitcoin’s Growth in the UK - 7th Mar 19
How Private Sector Debt Bubble Could Trigger the Next Financial Crisis - 7th Mar 19
What Commodities and Transportation Stocks Telling Us - Part2 - 7th Mar 19
What Comes After a Trillion in Student Debt? - 7th Mar 19
Dear Stocks Bull Market: Happy 10 Year Anniversary! - 7th Mar 19
The Importance of Financial Planning for Companies - 7th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Corporate Profits are Trending Higher. The Stocks Bull Market Isn’t Over

Stock-Markets / Stock Markets 2018 Jul 05, 2018 - 12:43 PM GMT

By: Troy_Bombardia

Stock-Markets

As we’ve demonstrated here at BullMarkets before, the U.S. economy, corporate profits, and stock market all move in the same direction in the medium-long term.

The final reading for Q1 2018 GDP (released June 28, 2018) demonstrates that corporate profits are still rising. And for all the people who think that earnings numbers are “manipulated” via GAAP rules, these are corporate profits according to the IRS. Fact.


But of course, nominal numbers (e.g. nominal corporate profits) are meaningless. Nominal numbers will always go up in the long term due to inflation. That’s why we care more about the inflation-adjusted corporate profits.

As you can see, real (inflation-adjusted) corporate profits made a new high as well. Real corporate profits tend to trend downwards before an economic recession begins.

Real corporate profits also trend downwards before an equities bear market begins.

December 1968

The S&P 500 peaked in December 1968. Corporate earnings peaked in Q1 1966, almost 3 years before the stock market peaked.

January 1973

The stock market topped in January 1973, along with corporate earnings. However, this bear market wasn’t supposed to start off as a bear market. The Medium-Long Term Model predicted it as a “significant correction”, but as new data came along, the Model turned the “significant correction” prediction into a “bear market” prediction.

March 2000

The S&P 500 peaked in March 2000. Corporate earnings peaked in Q3 1997, 2.5 years before the stock market peaked.

October 2007

The S&P 500 peaked in October 2007. Corporate earnings peaked in Q3 2006, 1 year before the stock market peaked.

Corporate earnings also top before economic-driven “significant corrections” for the stock market. For example, corporate earnings topped in Q4 1988. The next “significant correction” began in July 1990.

It’s also worth noting that real corporate earnings tend to lead 12 month forward earnings expectations by 1 year. This means that forward earnings expectations will probably continue to trend higher until mid-2019. That’s a medium-long term bullish sign for the U.S. stock market.

Click here for more market studies.

By Troy Bombardia

BullMarkets.co

I’m Troy Bombardia, the author behind BullMarkets.co. I used to run a hedge fund, but closed it due to a major health scare. I am now enjoying life and simply investing/trading my own account. I focus on long term performance and ignore short term performance.

Copyright 2018 © Troy Bombardia - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules