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.
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?
