Wall Street continues to be convinced that the economy is edging back up again after a stall following the tax cut boost and near 3% GDP figures in 2018.

I talked last Monday about how there were some key indicators like industrial production growth and construction spending that were not confirming such a resurgence… at least not yet. And such falling trends tend to be a leading indicator of falling profits.

This chart is more disturbing, as it comes from those very CEOs that got the direct benefits from the tax cuts at the beginning of 2018. Their confidence in the economy is not just slowing, it is plunging!

CEO Confidence Plunging: Why Would They Invest?They clearly and haven’t been making significant investments in new capacity as they don’t need it. The publicly-traded ones are buying their own stocks to goose earnings per share instead.

But are they seeing signs of declining demand from their customers? Are they worried about Trump getting impeached and ending the corporate tax and deregulation gravy train? All, legitimate concerns, which could accelerate the pending financial crisis. Wall Street is clearly not reacting much to that threat yet.

The next chart also clearly shows that earnings per share are cratering as well. Part of that is to be expected as the surge from the tax cuts does not continue forward. But the actual 4% decline in the third quarter should be alarming.

Chart: Earnings Are Declining: How Can That Be Good for Stocks?This combination of indicators simply does not bode well for the stock market, yet it keeps edging up. How long can the markets continue to be divorced from Main Street and the real world?

So, what does Wall Street see that these charts don’t?

Good question…

I say it simply sees “more crack” from lower rates and more QE.

How much longer can that last?

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Harry Dent
Harry S. Dent Jr. studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of his chosen profession that he turned his back on it. Instead, he threw himself into the burgeoning new science of finance where identifying and studying demographic, technological, consumer and many, many other trends empowered him to forecast economic changes. Since then, he’s spoken to executives, financial advisors and investors around the world. He’s appeared on “Good Morning America,” PBS, CNBC and CNN/Fox News. He’s been featured in Barron’s, Investor’s Business Daily, Entrepreneur, Fortune, Success, U.S. News and World Report, Business Week, The Wall Street Journal, American Demographics and Omni. He is a regular guest on Fox Business’s “America’s Nightly Scorecard.” In his latest book, Zero Hour: Turn the Greatest Political and Financial Upheaval in Modern History to Your Advantage, Harry Dent reveals why the greatest social, economic, and political upheaval since the American Revolution is on our doorstep. Discover how its combined effects could cause stocks to crash as much as 80% beginning just weeks from now…crippling your wealth now and for the rest of your life. Harry arms you with the tools you need to financially prepare and survive as the world we know is turned upside down! Today, he uses the research he developed from years of hands-on business experience to offer readers a positive, easy-to-understand view of the economic future by heading up Dent Research, in his flagship newsletter, Boom & Bust.