Archive | October, 2012

US Corporate Profits: Under Greater Scrutiny

US Corporate Profits: Continued Weak Top-line Performance in Q3 We have just completed an important week for corporate profit results for S&P500 companies. The percentage of reporting companies beating EPS estimates remains high (71%), but the percentage of companies beating top-line estimates remains disappointingly low at 36%. The weakness in top-line performance is a continuation […]

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China’s New Leaders Face Legacy Issues From 2008 Economic Stimulus

China‚Äôs Economy in Q3: Not All Bad News China announced last week that annual real GDP growth slowed to +7.4% in Q3 from +7.6% in Q2. The Chinese government has targeted real GDP growth of +7.5% for the full calendar year of 2012. This official growth target was revised down from +8.0% earlier this year. […]

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Massive Liquidity Preference Test the Potency of US Monetary Policy

Global Economic Slowdown: Blame Fiscal Consolidation, Not Monetary Policy In the wake of the most serious global economic slowdown since the end of the Great Recession, central banks in advanced economies have seemingly run out of ammunition in terms of being able to use interest rates to fine tune aggregate demand. The fact that short-term […]

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Placing the US Fiscal Cliff into Context

Economic Implications of the Fiscal Cliff Now that the Fed has invoked a third tranche of quantitative easing, financial markets have refocused their attention on the possible economic and financial implications of an unfolding US fiscal cliff scenario. Under current legislation, US fiscal policy will be tightened by 3% of GDP in 2013. Such a […]

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Making Sense Of Expectations For US Corporate Profits

Testing Times for Corporate Profits We are about to enter the Q3 reporting season for US corporate profits against a backdrop of faster-than-expected deceleration in global economic growth. The International Monetary Fund (IMF) is almost certain to revise down its economic growth forecasts for both 2012 and 2013 when it shortly releases its World Economic […]

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