Two critical US economic indicators - labour market conditions and investment spending - are suggesting the US equity market is looking tired
John Robertson
PortfolioDirect
Two critical US economic indicators - labour market conditions and investment spending - are suggesting the US equity market is looking tired. Corporate profits, on the other hand, are suggesting far more robust conditions. The corporate profit measure shown in the chart is from the Department of Commerce and not, consequently, confined to S&P 500 earnings. In the last two market cycles, the downturn in corporate profits has led the downturn in the market (the blue line) by several quarters. The economy wide measure of profitability contained in the official statistics highlights clearly the extent to which markets were running ahead of the underlying economics around 2000. There is little in the numbers to suggest anything similar happening at the present time. Against that background, equity prices should still have some latitude to move ahead.
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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business strategist and investment market professional for over 30 years after starting his career as a Commonwealth Treasury economist in Canberra. Since being Australia's top-rated commodities analyst and chief economist at one of Australia' leading stockbroking firms, he has advised companies across the mining, consumer products, IT and biotech sectors on their equity market relations. He leads the firm's investment evaluation and security structuring activities on behalf of the Australian Small Scale Offerings Board (ASSOB), the world's first equity 'crowdfunding' investment platform. John Robertson discusses the interaction of mining and investment markets in his weekly 'From the Capital' column in Mining Journal.
John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
Expertise
No areas of expertise
John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
Expertise
No areas of expertise
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