Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Bill Ounce who wrote (8107)	3/27/1998 11:10:00 AM
From: Bill Ounce	Read Replies (2) \| Respond to of 116836

Slide in corporate profits hints at stock market trouble ahead Personal opinion: Last time we had a correction, both stocks and gold went down. So, short term, perhaps puts on December 1998 OEX LEAPS make more profit than gold. For the longer-term, maybe gold is better. News item: WASHINGTON (March 26, 1998 5:02 p.m. EST nando.net) -- American corporations suffered their worst quarterly profit slide in almost four years, the government said Thursday in a report seen as an ill omen for the high-flying stock market [...] But economists warned the report could mark the onset of a classic profit squeeze that could lead to large stock-price declines this year. "This is a window on 1998. I think the biggest surprise the financial markets are going to see is much weaker profits," said economist David Jones of Aubrey G. Lanston & Co. in New York. With unemployment at a 24-year low and possibly headed lower, businesses will be caught between pressure to pay higher wages and price competition from Asian nations trying to export their way out of a slump, he said. market. After-tax corporate profits in the fourth quarter slipped 2.3 percent from the previous quarter, the first drop in more than a year and the largest since the first three months of 1994. The decline occurred, economists agree, before much of the impact of Asia's financial turmoil had been felt and at a time of otherwise robust economic expansion. [...] That does raise some questions as to whether the stock market, again, may have overreached. It may be vulnerable to some kind of correction," Robertson said. "Investors don't seem to have factored in this slowdown in corporate earnings." The Dow average jumped 23 percent last year and is up an additional 12 percent so far this year. Jones said a 20 percent correction, from the current level, "wouldnot be out of this world" in 1998.