EARNINGS SOAR – STOCKS DO NOT – WHY?
So what is up.
Earnings this year are up 18%.
Many firms way ahead of expert estimates.
Average earnings up 11% best ever since 2008 – already.
Stocks up 1%.
Investors don’t care.
What is de-coupled today?
What is new?
Something is new?
No chart no history shows this model. None.
So what do we KNOW for SURE?
- The world market movements are not AI software controlled by trillions – small investors not in those pools and most are already – are no influence on market prices.
- Earnings are pulling the sling shot back. RECORD 2018 earnings after profit taking and portfolio rebalancing by AI itself – are massively taking profits.
- AI is “worried” about unknowns of TRADE WAR POLICY.
- AI is aware the central banks are tightening monetary policy with soaring interest impacting BOND YIELD and AI is rebalancing massively from equities to bonds – in what is today after ten years the GREAT RE-BALANCING – never experienced before.
- Capital accounts remain so CASH HEAVY a tidal wave of investing in the Bottom of this SPRING CORRECTION we correctly predicted over a three year time frame into January. Accurate to a fault against all other forecasting.
We see Apple down 64 billion in worth in ten days.
Our Blog tells you to buy in the Apple Dip ( which is far from over yet until the news of earnings is reported and then the run on the news bottoms this cycle on Apple ). Buy on that dip – check with your licensed expert on that item. Always with their input never mine. Just explore opportunities to buy low and sell high. If you ask do I take my own advice – yep bought Apple in the dip myself. My blog tells you why this weekend. Your decision of course.
What else do we know. Central banks are rising interest into a debt world at record debt for nations and corporations. The higher interest for many over debt burdened is not sustainable at the time to refinance those trillions in loans. Decade default cascade is a factor AI software is “considering” as a risk to equity investing.
If the central banks – and it is a big if – as their failed policy is 100 year historic and a 100% track record – they not once get it right. They error and that causes a wave that sinks all ships. Today IF the central banks define NEW POLICY to normalize market interest rates over twenty years slower and more gradually than any time in history – we can EARN OUR WAY as a global economic community out of this mess – maybe – and if they keep the normalization over five years – too quick – too much – far too rapidly – that wave as it is now – will sink economic growth.
Already against record earnings down grading in GNP is taking place by 1/3 to 50% across nations. This downgrading is a CONSEQUENCE of Central Bank rush to normalize too fast too soon within failed central bank economic policy.
Central banks seek to fight global inflation. That is a good thing.
However sustained multi quarters of real inflation can accommodate such inflation policy slowly and in consequence to real inflation.
Today we have only OIL in a phony baloney price path – manipulated by elite cartels – that is not sustainable. Oil will crash to the 50’s and zero inflation will result – in fact DE-FLATION the central bank largest HORROR will unfold. Central Banks need policy to accommodate Oil the cost of everything else is temporarily in a speculation bubble that will soon crash and normalize. Central bank policy removing oil from inflation can move much more moderately and deliberately with world fragile recovery in mind.
Today the national security of the entire world is largely economic. Central banks acting together as they do can better coordinate policy. Policy moving forward must be job # 1 – keeping the world economic system safe. Job # 2 is inflation based on multi quarter sustained real inflation rising not blips and graph spikes that are aberrations and mean noting to real Global inflation. Balance in policy is required with new modeling and economic global adjusting. The old antique models are creating today’s pain – in our opinion – needlessly.
The result of BAD and FAILED central bank policy that requires a re-frame by very smart folks who see the issues clearly.
Much more important is the urgent need for a G 100 Economic Constitutional Conference for the entire world – to over three years forge a world TREATY nations ratify for FAIR TRADE AND TAX POLICY and ZERO TOLERANCE for unwanted system speculations of capital flows. This – REGULATORY – RE-THINK in an AI digital age where capital flows are software imbalanced is prudent. It requires a cooperation reset back to TRUST and SYSTEMS assuring trust is warranted. Without a global REGULATORY RE-THINK the system risks are soaring toward a later SUPER CRASH.
But not yet and not now without geopolitical upsets we can’t see yet. Though they are also possible.
We think the Spring Correction is not over as we reported in our blog this week. You will know when it is over. Buy in that dip if your in to markets as many are.
We think it will roar back and stay roaring when it does.
Be looking for that roar.
Today is an anomaly in the Force.
A consequence of digital market transitioning – and central bank policy fire wall to growth creating unnecessary uncertainty to recovery world wide.
Perhaps they’ll read my blog?
This buds for YOU.
BERNY DOHRMANN – ON WHAT “IS” GOING ON OUT THERE