CNBC_Logo
EXCERPTS FROM:
Recession sign is in play and has 81% accuracy
Jeff Cox | Thursday, 25 Feb 2016

Since corporate profits turned negative in mid-2015, Wall Street has pondered whether it’s just a passing phase or a signal of something worse. History strongly suggests the latter.

Recessions have followed consecutive quarters of earnings declines 81 percent of the time, according to an analysis from JPMorgan Chase strategists, who said they combed through 115 years of records for their findings.

The news gets worse: Of the remaining 19 percent of the time, recession was only avoided through either monetary or fiscal stimulus. With the Federal Reserve holding limited easing options and a deeply dysfunctional Washington thwarting a fiscal boost, the prospects for help are not good.

The warning comes amid a stock market hovering around correction territory and a mixed economic picture. Citigroup this week warned of escalating risks for a global recession, though data Thursday on durable goods orders suggested the manufacturing sector may be shaking off a contraction phase. Fed officials in recent days have been talking down recession risks.

“Absent a pickup in consumption and further weakening in the U.S. dollar, we continue to see rising risk of earnings recession in the U.S.” JPMorgan’s equity strategy team said in a note to clients.

Corporate earnings began to weaken significantly in the third quarter of 2015. The drop became more pronounced in the nearly completed fourth quarter reporting season, which is likely to see a drop of 3.6 percent.

Worse, future estimates are declining, indicating the damage won’t end until at least the third quarter of 2016. First-quarter profits are likely to fall 6.5 percent, while the second quarter is expected to show a 1.1 percent drop, according to FactSet. Sales already are well into recession territory, with four consecutive quarterly declines.

These articles are provided for informational purposes only and were obtained from publicity available sources on the Internet. These articles do not constitute financial advise or trading recommendations by Global Asset Management ("Global"). Global neither warrants the accuracy or completeness of the information contained in these articles, undertakes to update them, nor is it responsible for any omission or error contained in these articles. Viewers are encouraged to conduct, and should only rely on, their own independent research.
The purchase or sale of precious metals involves substantial risk and volatility. If you are contemplating purchasing and/or selling precious metals, you should consult with an independent financial advisor to learn about the inherent risks. Global does not render, and nothing in this website should be construed as, financial advise, a trading recommendations or a solicitation for the purchase or sale of precious metals.
 
 

Daily Chart : Gold

Daily Chart : Silver

Daily Chart : Platinum

Daily Chart : Palladium

 
 
 

Copyright © 1996-2015 Global Asset Management. All rights reserved.

2425 Hollywood Blvd. Suite 100. Hollywood, Florida 33020 :: info@globalam.net

Phone: 954.921.1021 :: Fax: 954.921.1536 :: Toll Free: 1.888.421.1021