Morici’s piece doesn’t make a stock market forecast, but his description of the U.S. economy as “teetering on the brink of another recession” is a real thrill kill for investors. His piece offers a litany of every bit of bad news we’ve heard about the economy lately, including slow economic growth, slowing home sales, weakening manufacturing reports, and low consumer spending.
US Retail Sales data by YCharts
He also dismisses the idea that new industries like social media will ever create a lot of jobs, or that innovative technology, such as smartphone advancements, will ever create a lot of jobs anywhere but overseas. He points out that no one is creating a lot of jobs here at the moment.
US Change in Nonfarm Payrolls data by YCharts
So what’s an ordinary investor to make of these expert opinions? Perhaps they’re not as contrary as they appear. Many of the biggest companies have been producing record profits in what is a continually crummy U.S. economy.
These are, of course, very early days for these companies, which may yet go on to achieve great success for all involved. But the original dot com bust should have taught us that investing in hype and revenue growth that’s not paired with a steadily improving earnings stream is quite risky, especially when there are outsized valuations on the shares. Looks like we’re learning.
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About the Author
Dee Gill is an editor for the YCharts Pro Investor Service which includes professional stock charts,stock ratings and portfolio strategies. YCharts® Pro offers proven stock ratings, data downloads, portfolio strategies and avanced stock screening. Free 14 Day Trial is available.
