www.silverdoctors.com
Submitted by PM Fund Manager Dave Kranzler, Investment Research Dynamics:
Wall Street, fearful that consumers are running out of cash
heading into the crucial Christmas retail season, are selling off retail
stocks and everything else sensitive to consumer spending. – New York Post
The retail sales report for October was much worse than expected.
Not only that, but the Government’s original estimates for retail
sales in August and September were revised lower. A colleague of mine
said he was chatting with his brother, who is a tax advisor, this past
weekend who said he doesn’t understand how the Government can say the
economy is growing (Hillary Clinton recently gave the economy an “A”)
because his clients are lowering their estimated tax payments.
Businesses lower their estimated tax payments when their business
activity slows down.
In September the Fed released its Consumer Expectations survey which
showed a collapse in consumer income and spending expectations. This
does not occur in an economic system which is experiencing growth.
The price of oil traded below $40 briefly this morning. The
propaganda machine would have you believe that OPEC is driving the price
down to put the U.S. shale industry out of business. This has to be
one of the most idiotic rationalizations for a negative economic
occurrence I’ve ever seen (that, and “the bad weather ate my homework”).
The price of oil is collapsing because demand for oil is collapsing.
Demand for oil is collapsing because economic activity globally,
including and especially in the U.S., is collapsing.
Once again the Empire Fed Manufacturing survey
for November continued to plunge deeper into negative territory. It
missed Wall Street analyst expectations once again by a wide margin.
The index fell to negative 10.74 vs the -6.34 forecast. The average
work week fell for the fourth straight week. I have news for everyone,
if the average work week falls, it means people are making less money.
Less money translates into a disaster for holiday sales.
Retail sales this holiday season are setting up to be a disaster. Already most retailers are advertising “pre-Black Friday” sales events. Remember when holiday shopping didn’t begin, period, until the day after Thanksgiving? Now retailers are going to cannibalize each other with massive discounting before Thanksgiving.
Anybody notice over the weekend that BMW is now offering $6500 price
rebates? The collapsing economy is affecting everyone, across all
income demographics.
Last week we saw the stocks of Macy’s, Nordstrom and Advance Auto
Parts do cliff-dives after they announced their earnings. I mentioned
to a colleague that the Nordstrom’s report should be the most troubling
for analysts. Nordstrom in their investor conference call said
that they began seeing an “unexplainable slowdown in sales in August in
transactions across all formats, across all catagories and across all
geographies that has yet to recover.”
Nordstrom caters to the “keep up withe Jones’” middle class household
who works hard to project an image of prosperity but uses credit cards,
auto loans and home equity debt to keep the gerbil wheel spinning.
That game has hit a wall.
Amazon stock is down over 2% this morning without any meaningful news
reported that would have triggered the selling. But anyone who reads
my AMAZON dot CON report will understand why AMZN is the most overvalued stock in the S&P 500 now:
USA Today: Amazon breaks barrier: Now most costly stock
– “The online retailer’s shares are now trading for 942 times diluted
earnings over the past twelve months – making them most expensive in the
Standard & Poor’s 500.”
Someone sent me a copy of Wall Street’s 2013 consensus analyst
earnings estimates for Amazon in 2014/2015. Back then Wall Street was
forecasting that AMZN would earn $2.58/share in 2014. The high-end
estimate was $4.55. AMZN reported a 52 cent per share loss in 2014. The consensus forecast for 2015 was $5.44 with $9.22 on the high-end. On a trailing twelve month basis through Q3 2015, AMZN has reported earnings per share of 70 cents.
I believe Amazon stock is going to crash – it’s just a matter of time…
沒有留言:
張貼留言