Corporate Profits : SP500

[Wallace]

the attached chart illustrates corporate profits after tax compared to the SP500

'Short Take' - February 7, 2007 Mark Pender, Senior Writer, Econoday
http://www.nasdaq.com/econoday/repo...urce_shorttake/year/2007/weekly/06/index.html

what surprised me looking at the chart is first the stock/index price acceleration 95 - 00
second the corporate profit tripling acceleration since 02 v the moderate increase
during the previous 26 years shown on the chart

I wonder if it wouldn't be better watching the corporate profit chart rather than charts of
the indicies to determine when 'the top' will occur and forthcoming recession (?) begin

how good an economic indicator is corporate profits ?

 

[shelupinin]

Quote from Wallace:

the attached chart illustrates corporate profits after tax compared to the SP500

'Short Take' - February 7, 2007 Mark Pender, Senior Writer, Econoday
http://www.nasdaq.com/econoday/repo...urce_shorttake/year/2007/weekly/06/index.html

what surprised me looking at the chart is first the stock/index price acceleration 95 - 00
second the corporate profit tripling acceleration since 02 v the moderate increase
during the previous 26 years shown on the chart

I wonder if it wouldn't be better watching the corporate profit chart rather than charts of
the indicies to determine when 'the top' will occur and forthcoming recession (?) begin

how good an economic indicator is corporate profits ?

nice chart... so current DJIA, SP500 etc. are not overvalued....

 

[ByLoSellHi]

Quote from shelupinin:

nice chart... so current DJIA, SP500 etc. are not overvalued....

Maybe not now.

But if one wants to form an educated guess as to where equity prices may be 9 months from now, consider that net earnings are expected to slow to 6 or 7% from the 16.5% we hit last year.

 

[S2007S]

The four gray bars to the right are future expectations as gauged by Wall Street analysts. It's not unusual at all for analysts to underestimate future earnings; in fact that's been the exact pattern through the whole expansion.


they have been underestimating for the last 20 quarters.

Remember under promise and over deliver.

 

[ByLoSellHi]

Quote from S2007S:

The four gray bars to the right are future expectations as gauged by Wall Street analysts. It's not unusual at all for analysts to underestimate future earnings; in fact that's been the exact pattern through the whole expansion.


they have been underestimating for the last 20 quarters.

Remember under promise and over deliver.

Q4 '06 broke that trend, though. Lots of misses, and lots of shortcomings.