Wall Street

U.S. Companies Post Profit Growth Not Seen in Six Years

America’s largest companies are on pace to post two consecutive quarters of double-digit profit growth for the first time since 2011, helped by years of cost-cutting, a weaker dollar and stronger consumer spending. Earnings at S&P 500 companies are expected to rise 11% in the second quarter, according to data from Thomson Reuters, following a 15% increase in the first quarter. Close to 60% of the firms in the index have reported second-quarter results so far. Corporate America’s strong earnings performance comes as several policy initiatives that were expected to help boost companies’ bottom line—corporate-tax cuts and increased government spending on infrastructure—have been sidetracked amid political infighting in Washington, D.C., which culminated with the recent failure of the health-law bill. Even as activity inside the Beltway bogged down, the markets have been on an almost nonstop rally since the election. The S&P 500 is up 16% since early November and 10% this year. “You could argue that the stock-market investor overestimated Trump but underestimated earnings,” said Christopher Probyn, chief economist for State Street Global Advisors. The second-quarter profit gains are spread across industries from Wall Street banks to Detroit’s car factories to Silicon Valley’s software labs. Earnings are expected to decline only in the utilities sector, according to data from Thomson Reuters. ​ Several factors are at work, analysts and economists say. A weaker dollar has made it easier to sell U.S.-made goods overseas and has kept borrowing costs low. U.S. wages have improved enough to help bolster consumer spending without raising employer labor costs so much to dent the bottom line. Companies also continue to reap the fruits of their recent zeal for cutting costs, Mr. Probyn said. “We underestimated some of the cost-cutting and restructuring that has gone on within the various industries; that has permitted earnings to keep doing well.” Sales, too, rose in the quarter, by an expected 5%, the second-biggest increase in more than five years, according to data from Thomson Reuters. The figures reflect actual results for about half the S&P 500 index, and analysts’ estimates for those that had yet to report results as of Friday. On Friday, the Commerce Department reported that gross domestic product rose at a 2.6% rate in the second quarter, up from 1.2% in the first quarter.

And the economy continues to roar on in this new Trump era..  To read the rest of this article from the Wall Street Journal, click on the text above.

‘Trump Bump’ Drives Dow Jones Through Historic 20,000 Mark

The Dow Jones Industrial Average (DJIA) broke through the historic 20,000 mark to close at 20,007, as the “Trump Trade” rally drove world stock prices higher on January 25. Traders’ enthusiasm was driven by a barrage of supply-side “America First” executive orders issued by President Donald Trump this week, that froze regulations, restricted federal non-military hiring, undermined Obamacare, and moved to build Keystone XL and Dakota Pipeline projects. The Kansas City Star also published leaked details of the initial 50 infrastructure projects that the Trump administration would seek to fund on a 50/50 split between the federal government and private developers. The proposals are estimated to cost $137.5 billion and generate tens of thousands of short-term construction jobs, while the completed projects would create 193,350 direct and 241,700 indirect long-term jobs. The bullish “risk on” 155-point price surge capped the second-fastest 1,000-point trip in the DJIA’s history, according to Bloomberg. “Trump Trade” enthusiasm whacked gold prices by almost 2 percent. With traders expecting a stronger U.S. economy to drive higher worldwide demand, the new German 30-year government bond auction was priced at an average yield of 1.20 percent, almost twice as the rate of 0.64 percent for a similar auction in October. Fear of protectionism spiked Chinese government bond yields to 3.34 percent, as Beijing authorities tightened loans to financial institutions in an effort to avoid a banking crisis. Trump’s team has been working with the non-partisan Office of Management and Budget to develop its budget and tax cut proposals, which are expected to reach Congress in the next 45 days. The new administration appears to also be sticking close to the Heritage Foundation’s “Blueprint for Balance: a federal budget for 2017” in a concerted effort to seek budget savings. Although it was widely reported by the mainstream media that that Donald Trump was only at 37 percent approval in the Quinnipiac University Poll on the cusp of his inaugural, a Rasmussen poll Wednesday morning gave President Trump a 57 percent approval rating. President Trump’s positive momentum is also driving populist movements across Europe challenge for control. The Netherlands’ right-wing nationalist Party for Freedom, led by Geert Wilders, is leading in voter polls, with 29.0 percent support for the March 15 elections. France’s Marine Le Pen and her right-wing populist National Front is leading with 26.2 percent for April 23 elections. And Germany’s right-wing populist and Eurosceptic Alternative for Germany is now in third place, with federal elections currently planned for September 24.

Excellent!!!    🙂

Alibaba Surges in New York Trading Debut After U.S. IPO

Alibaba Group Holding Ltd. surged in its U.S. trading debut, after the company raised a record-breaking $21.8 billion in an initial public offering.

Not only is China taking us to the cleaners in the current space race (and yes, there IS one going on), they’re kicking our collective butts economically. Wow..