Corporate earnings reports for the spring quarter are mostly in by the first week in August. Overall, they paint a pretty rosy picture for America, Inc., as Bloomberg predicts profits at S&P 500 companies rose nearly 9.5 percent; sales rose more than 4 percent. So far, 75 percent of companies that have reported earned more than equity analysts predicted.
“The results have been really solid,” said chief economic strategist John Canally at LPL Financial in Boston. He said the results bode well for the second half of 2014, especially since GDP growth has picked up since the winter reversal.
Canally said companies are mostly plowing their profits back into the company; not adding to their payrolls, or investing in new plant and equipment.
“It’s mergers and acquisitions, increasing dividends, share buybacks,” Canally said. “Companies are doing what companies normally do: trying to boost share price for their shareholders. They’re just not doing a lot of hiring right now.”
Paul Ashworth, chief U.S. economist at Capital Economics in Toronto, said U.S. companies have increasing worries overseas — where a lot of their profits are earned — due to geopolitical and economic crises in Russia-Ukraine, Iraq-Syria, Israel-Palestine, Argentina, and Europe.
“Some of those geopolitical events have made people rethink how optimistic they are about the world economy over the next 12 months,” said Ashworth — Which, he said, explains some of the stock market's recent slump.
The U.S. Army has begun interviewing Sgt. Bowe Bergdahl about his disappearance in Afghanistan that led to five years in captivity by the Taliban, his attorney and an Army spokeswoman said Wednesday.
A U.N.-backed war crimes tribunal on Thursday sentenced two top leaders of the former regime to life in prison on war crimes charges for their roles during the country's 1970s terror.
The outcome of the hearing could put more pressure on the Supreme Court to make a decision on states' same-sex marriage bans.
The bank would pay between $16 billion and $17 billion for alleged mortgage-related abuses, according to a source familiar with the talks. A final announcement could come next week.
At a news conference Wednesday, the president said he would act when he can without Congress but said there are limits to his authority. He also spoke about a range of foreign policy issues.
By October, the state will have the most ambitious commercial food waste ban in the U.S. Institutions that produce more than a ton of waste a week will have to find new uses for their scraps.