According to Michael Lombardi, lead contributor to Profit Confidential, CEOs of S&P 500 companies are worried about the state of the global economy. More specifically, Lombardi believes they are worried about future corporate earnings, because in addition to the continuing problems in Europe, China is not stabilizing and the U.S. is slowing.
In the article “Right from the Mouths of Some of the Biggest CEOs,” Lombardi notes that S&P 500 companies have reported weak corporate earnings growth, and for the last three quarters, revenue growth for the S&P 500 companies has declined dramatically.
“Many CEOs are also very upset about the ‘fiscal cliff’ and believe Congress needs to do something to remove this uncertainty,” says Lombardi.
Lombardi cites the CEO of United Technologies, who states, “It is certainly a challenging environment out there, with a slowing global economy.”
“Notice that this comment wasn’t directed solely at Europe and Asia, but also the U.S., which is implied by the slowdown being ‘global,’” Lombardi notes.
Lombardi also points out that Starbucks met its corporate earnings estimate after having slashed it by 10%.
“The company forecasted weak revenue growth going forward in 2012 due to weakening customer traffic in the U.S. in both June and July,” explains Lombardi.
Lombardi goes on to cite Coca-Cola, Mattel, and Harley-Davidson, all of which echoed similar sentiments.
These companies are all seeing a challenging global economic environment and weak consumer confidence in China, Europe, and yes, even the U.S., Lombardi concludes.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.