The stock market is back at all-time highs.
But the gains are as hollow as the suits that tout them on TV.
Earnings growth for the S&P 500 in Q2 was negative 34%. It's expected to be negative 22.9% in the third quarter and negative 12.8% in the fourth quarter. Merry Christmas, you filthy animal.
You will hear that companies are "beating" earnings expectations. And that's because the same hollow suits have cut the expectations so low even their spineless bodies could jump over them.
Some specific sectors and companies are doing well amid the overall earnings bloodbath. The Utilities and Health Care sectors posted positive earnings growth in Q2. Online retailers are crushing it. Yes, I saw Lowe's earnings.
But pointing to a few big winners does not change the fact that the entire S&P 500 is experiencing negative earnings growth now and will continue to for several quarters to come.
At the same time, the American economy, consumer, and middle class are being assaulted on multiple fronts.
First off, they aren't benefiting from higher stock prices. The Federal Reserve has acknowledged that the bottom 90% of American households by net worth own just 8% of the U.S. stock market.
A cumulative 55 million Americans have lost jobs since the pandemic began. You can't refinance your home at these historic low rates when you don't have a pay stub.
But you still have to buy things that now cost ever more with the dollar at two-and-a-half-year lows and inflation mounting, being driven by both demand and monetary factors. Prices are rising so fast that even government numbers are showing inflation with the CPI printing its highest number since 1991.
Lumber prices are up 65% in the past six months! The middle piggy is going to have trouble building that new house in the country.
Mortgage delinquencies are already at nine-year highs. Some data showed that one in three American households owed money for missed rent or mortgage payments at the start of August.
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It's amid this backdrop...
...Historically low rates are yielding nothing in the bond market... (Ball Corp. just priced the lowest ever junk bond yield of 2.875%)...
...Negative earnings growth across the entire stock market is expected to continue for several quarters while the American consumer is down for the count...
...And rising inflation means returns have to be even higher to stay ahead...
...That the greatest investor in the world could not find anything to buy but a gold stock.
I should say I told you so.
Billionaires not named Buffett have been loading up on gold and gold stocks for some time now.
This one here is even part-owned by Barrick... the very company Warren Buffett just bought.
Plus a major permitting milestone is inching ever-closer.
See why everything is lining up for this gold bull market and this gold stock in my video here.
Call it like you see it,
Nick Hodge
Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street's Underground Profits. He also heads Nick's Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.