This Is How I Know the Market's in Trouble

by Andrew Zatlin

The recent market crash was triggered by rising interest rates. 

But now a new trigger is emerging.

For most investors, this will mean more losses.

But for you, it could mean big profits.

For a transcript of this video, see below. This transcript has been lightly edited for length and clarity.

This Is How I Know the Market’s in Trouble

One data point above all the others tells me when it’s time to buy or sell stocks.

Corporate profits.

The reason is simple…

When a company’s profits are trending up, the company’s hiring will likely be up (good for the economy), and its stock price will be up (good for investors).

But when corporate profits slide, companies cut hiring, they stop growing, and their stock drops.

And right now, corporate profits are in trouble…

Walmart: Everyday Low Profits

For example, look at Walmart (NYSE: WMT).

In early 2022, it said its earnings would be up…

By May, it changed its tune. It said earnings would fall by one percent…

And yesterday, it said earnings are projected to fall thirteen percent.

What’s the problem? According to Walmart, inflation in food and fuel is taking a huge bite out of customers’ pocketbooks — and now it’s affecting how customers spend.

Essentially, customers are being forced to spend more of their budget on necessities like food and fuel, and less on the merchandise that Walmart sells.

But when Walmart’s sales drop, that means it will purchase fewer products from its vendors, and it will hire fewer employees.

In other words, these issues cause a terrible ripple effect throughout the whole economy.

And keep in mind, that’s the impact from just one company in the stock market…

The Market’s Slide Will Continue

Imagine what happens when several companies in the S&P 500 start announcing that profits are down. It won’t be pretty.

To see what I mean, check out this chart. It shows the growth in profits of U.S. non-financial companies over the last decade or so.

Check out the arrow on the right-hand side. See how it’s indicating growth of around fifteen percent? At first blush, that seems solid.

But now look further back in time… and you’ll see that growth has crashed.

And as that growth crashes, so will the stock market.

The market has already had a terrible, scary year so far. But it’s yet to confront what’s happening with sliding profits from Walmart, Whirlpool, Target, etc.

Bad News for the Market, Good News for You

At the end of the day, bad news for corporate profits means bad news for the stock market.

Furthermore, it means bad news for investors — at least, most investors.

If you’re a member of my premium service, Moneyball Crash Alert, you’ve been making money in this market.

Our first three picks delivered double- and even triple-digit returns. Furthermore, of the sixteen brand-name companies we warned investors to AVOID, fifteen are down.

To learn more about Crash Alert, or to sign up, one of my team members would be happy to help. Just call 844-615-1123.

Zatlin out. Talk to you soon.

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Andrew Zatlin
Andrew Zatlin
Moneyball Economics