Published July 17th, 2011
Dallas Morning News
By: Ed Butowsky
This month’s job report showed the U.S. economy is weak and getting weaker. the report caused the stock market to drop because it indicates that corporate earnings will be thinner because consumers are earning less and spending less.
Currently, the majority of earnings for large, multinational companies comes from exporting products to international markets. A weaker dollar has contributed to this robust trade. If the dollar strengthens, this benefit will evaporate and the multinational companies will need to rely more on our domestic economy to achieve higher earnings.
If employment doesn’t pick up soon, which I don’t think it will, and if the dollar starts to strengthen, we could see a lot of pressure on earnings. This is why it is important for savvy investors to follow employment trends.
During weak stock market periods, it is important to stick with companies that pay nice dividends and have good business models. Two examples to consider are Dallas-based AT&T Inc. and 3M Co.
Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry. Ed is also a frequent guest on other networks such as CNN, NBC, ABC, Fox News, Fox Business, and Bloomberg to name a few.
Check out some of our other articles:
- US Stocks Drop For Sixth Straight Week
- Interest Rate Sensitive Bonds Could Be A Problem
- Homeowner Horror
- Stagflation May Be On The Way