4/9/16: Earnings per Share

You know the meme: corporate sector is healthy world over and the only reason there is no investment anywhere in sight on foot of the wonderfully robust earnings is that… err… political uncertainty around the U.S. elections. Because, of course, political uncertainty is everything…

Except when you look at EPS

H/T @zerohedge 

Now, what the above is showing?

1) EPS is down in the politically ‘uncertain’ U.S.

2) EPS is even more down in the politically less ‘uncertain’ Europe (though you can read on that subject here: http://trueeconomics.blogspot.com/2016/09/4916-some-points-on-russian-european.html

3) EPS has been falling off the cliff since the ‘political uncertainty’ (apparently) set in 4Q 2012 in the U.S. One guess is the markets expected, correctly, the epic battle between The Joker and the Corporate Godzilla back then. And in Europe, since mid 2013, apparently, markets had foresight of who knows what back then.

But never mind, there is no secular stagnation anywhere, because earnings are, apparently very very healthy… very robust… very encouraging… All of which means just one thing: the markets are not overpriced or overbought. Pass de Kool-Aid, lads!

10/12/15: Europe's M&A activity lowest in 17 years

While the U.S. companies are gorging themselves on M&As (see post here: http://trueeconomics.blogspot.ie/2015/12/71215-another-nothing-to-see-here-chart.html), while shying real organic investment (see post here: http://trueeconomics.blogspot.ie/2015/11/141115-more-evidence-us-capex-cycle-is.html), Europe's 'repaired' economy is shying away from both.

Europe's M&A cycle is weak - second weakest for the period of 1998-2015:

Which makes for some interesting reading, especially when one realises that most recent quarterly growth in Europe was underpinned by domestic demand and inventories build up... Time for ECB to start buying companies outright...