“Sell in May and go away? That might be too late, given the trend in earnings growth, reports investment weekly Barron’s.
Negative profit warnings in the first quarter outpaced positives by a wide margin. Meanwhile, earnings per share (EPS) growth is far below previous estimates, the weekly points out.
S&P Capital/IQ sees EPS growth of less than 1 percent and Thomson/Reuters is just over 3 percent. That’s compared to double-digit forecasts a year ago, Barron’s noted.
In a sign of rough waters to come, big box retailer Best Buy says it will shut 50 stores, eliminate 400 corporate-level positions and slice $800 million in costs.
The retailer has about 1,400 U.S. locations.
Best Buy lost $4.89 per share in its most recently reporting vs. a gain of $1.62 a year ago.
The weak performance is indicative of the “non-recovery” recovery Americans have faced for the past several years.
A recent Bloomberg consumer confidence survey, for instance, showed that nearly of third of households had a favorable view of the economy in terms of spending, a three-week trend.
Nevertheless, the index remains at minus 34.9, compared to its average since inception of minus 15.2.
The survey has a three-point margin of error. Falling below minus 40 indicates recession.”If you enjoy the content at iBankCoin, please follow us on Twitter