Global Financial Markets Go Nuts
by Wolf Richter
WolfStreet.com
April 12, 2015
The global economy has, let’s say, some issues, including a slight demand problem. Growth has shifted into low gear in China and has stumbled in the US so far this year, while Europe has trouble wading out of the mire. But stock markets jubilated last week:
Hong Kong’s Hang Seng soared a stunning 7.9% followed by the Shanghai Composite’s jump of 4.4%. Chinese stocks are beautifully spiking as everyone in China is now once again gambling on them as a way to get rich quick. It worked out last time too. In Europe, the German DAX rose 3.4%, The British FTSE 4%, and the French CAC 40 3.5%. Stocks have been booming in Europe all year, with for example the DAX up 26% year-to-date! Japan’s Nikkei and India’s SENSEX rose about 2% for the week. The S&P 500 “edged up,” given how this week has been, by only 1.7%. It was a phenomenal week for global stocks.
So corporate earnings look terrible for the first quarter. In the US, quarterly earnings estimates have been slashed by the largest amount since 2009, and are now expected to decline. It’s not just energy. Some of this is merely an effort to lower the bar so far that even companies with crummy earnings can still clear it, and that by “beating” the estimates – no matter how terrible earnings are – shares can still march higher. Either way, it doesn’t look good.
The Rest…HERE
