Tags: Edwards | earnings | data | recession

SocGen Strategist Albert Edwards Says Earnings Data Back His Recession Call

By    |   Thursday, 12 December 2013 07:45 AM EST

Societe Generale equity strategist Albert Edwards says his recent prediction that the U.S. economy is headed for recession has generated "hoots of derision," MarketWatch reports.

But recent earnings data prove his point, Edwards says in a commentary obtained by the news service.

If the economy is swimming ahead nicely, "how come Thomson Reuters has just reported the fastest pace of U.S. earnings downgrades on record?" he said.

Editor’s Note:
See Pastor Explain His Biblical Money Code for Investing


The Thomson Reuters statistics show that companies in the Standard & Poor's 500 Index have offered negative guidance 103 times, compared to only nine examples of positive guidance. MarketWatch didn't cite a timeframe.

That 11.4 to 1 ratio favoring negative guidance is the biggest negative ratio on record. The second place figure — a negative 6.8 ratio — came in the first quarter 2001, when the economy was entering recession.

In addition, Thomson Reuters says analysts have lowered their fourth-quarter earnings forecast to a gain of 7.8 percent from 10.9 per at the beginning of the quarter

"If, as we suggested, the margin cycle is turning down, profit forecasts over the next few weeks will be eviscerated. To me, this is consistent with recession."

Others, however, say economic growth is increasing. Pimco predicts GDP will expand 2.25 to 2.75 percent next year from 1.8 percent this year.

"The U.S. economy is healing," Pimco CEO Mohamed El-Erian told Bloomberg. "Household balance sheets are in a better place."

He was encouraged by the 203,000 gain in payrolls last month and the drop in unemployment to 7 percent. "The breadth of improvement was notable," El-Erian said.

Editor’s Note: See Pastor Explain His Biblical Money Code for Investing

Related Stories:







© 2024 Newsmax Finance. All rights reserved.


StreetTalk
Societe Generale equity strategist Albert Edwards says his recent prediction that the U.S. economy is headed for recession has generated hoots of derision, MarketWatch reports.
Edwards,earnings,data,recession
297
2013-45-12
Thursday, 12 December 2013 07:45 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved