As discussed in another thread, calling the end of financial crisis might be smart now. Stock market always looks forward. After financial crisis, the next question is whether we'll see a short and shallow economy downturn. Many people, including ECRI, focus on consumers and use it as an leading indicator.
The logic is really straightforward. If we view the economy as a link, i.e.
consumer --> retailer --> manufacture --> mining and agriculture
with consumer sits on the top of the link, one would be deeply worried when consumer stopped functioning well. Bank and tech are not on the link because they are services to the economy and will be as well affected by the economy and thus the consumer.
I was worried by dim consumer sentiment a while ago but after some rethinking I kind of discounted its importance. The link is an oversimplified model to the economy. Who are those consumers? they are employees of retailers, manufactures, mining and agriculture. So instead of a link, it’s actually a network. With that in mind, until we see evidence that most parts of the network is affected, it’s ok to remain optimistic that resilience at other part will bring consumer sentiment back to normal level.
This ER season may offer some insight. When company report their quaterly result, they report two important numbers, earning and sales. The two numbers have different economical meaning and should be treated differently. Sales indicates the demand to the products or services the company provided, while the earning indicates how effective the company draw cash from its operation. Certainly earning is more important if one want to forecast its stock price. The sales number, on the other hand, tells us the healthiness of its downstream companies. If the downstream companies is not healthy, they surely will not incur much more demand, and the sales of the upstream company will be reduced.
Does this ER season tell us that the other parts are affected? With sales keep rising (if i remembered correctly, GE's sales still beat expectation), I didn’t see any evidence, yet.
[ 本帖最后由 还在发呆 于 2008-4-16 02:26 编辑 ] |