Buckle Up for These Earnings Results

Poor first quarter earnings results and slow retail sales numbers show that the U.S. economy is in deep trouble...  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [Browser View]( [Wealthy Retirement]( Kicking Off Earnings Season - Not With a Bang, but With a Whimper Jody Chudley, Contributing Analyst, The Oxford Club [Is Another 1970s-Style Oil Crisis Really Possible?]( For 45 years, Saudi Arabia and America have enjoyed a special relationship. We bought its oil. And it priced its oil in U.S. dollars. But the special relationship could be on the verge of ending... causing another 1970s-style oil crisis. [Here's why.](  Editor's Note: Maybe you've noticed lately that here at Wealthy Retirement, we're excited for Alexander Green's latest partnership with Bill O'Reilly, [The Smartest Investment Strategy of All Time]( summit. That's because, in a bleak economy like the one Contributing Analyst Jody Chudley paints for us below, it's important to find ways to adapt and profit. And Alex's strategy doesn't just help folks weather the current economy. It's designed to help them see how to double their money... So please join us TOMORROW, April 22, at 1 p.m. ET. [Click here]( to save a spot in the free, first-ever online broadcast of this special event. - Mable Buchanan, Assistant Managing Editor ---------------------------------------------------------------  [Jody Chudley]  First quarter earnings season officially kicked off on April 14. What are the numbers telling us so far? The economy is bad. Really, really bad. The big banks kicked things off and made it very clear that the world has changed. These companies reported huge hits to earnings as a result of taking billions of dollars of loss provisions to prepare for loans turning bad.  [Chart - Loan Loss Provisions at Biggest U.S. Banks ]  The banks are a bellwether of the economy. Their loss provisions are based on what they are seeing on the front lines from their customers. It's no shock that what the banks are seeing is bad. The economic readings we've seen rolling in have been unlike anything that any of us have ever seen. Take March retail sales in the United States, for example. In the month of March, retail sales plummeted by 8.7%, which is the biggest decline ever recorded in government data.  [Chart - Retail Sales Plummet ]  That is a stunning chart, but it still doesn't even give you the full picture of how bad March was. The retail sales number in this chart includes the big surge in grocery shopping that took place in March as we all stocked up to be shut in. The March retail sales numbers for items like cars, sporting goods and furniture all show about 25% declines. For clothing and accessories, the drop was more than 50%!  [Chart - Retail Store Sales by Category ]  If you have ever wondered what happens to the economy when the vast majority of Americans lock themselves in their homes and come out only to buy groceries... unfortunately, now you know.  417-3! Congress Passes Law That Could Reduce 401(k)s. [Click Here for Details.](  Take a Deep Breath... Next Earnings Season Will Be Worse This is the third full-blown stock market crash that I've invested through. (I was 14 in 1987 when Black Monday hit, but my portfolio then consisted of comic books and hockey cards. So I got through that one unscathed.) But for the 2000 and 2008 crashes, I was right on the front lines. What I've noticed from those two crashes is that each of them had one very specific moment that I can remember as clear as day. Those were the moments I realized that things were about to get really scary. The moment I'm going to remember from this crash occurred on Thursday, March 12. My daughter and I had just arrived home from her swimming club, and she asked me to read a book before she went to bed. Before we got started, my phone buzzed with a news update from Apple. In that update, there were three big pieces of news: - President Trump had announced he was suspending all flights from Europe. - The NBA season had been suspended. - Tom Hanks had COVID-19. That was when I fully realized we were about to experience something really unusual. I mention that because our economy was actually operating pretty normally up until that point. The ugly first quarter earnings numbers and financial data we are now seeing mainly reflect March 12 through March 31 - a period of 20 days. That means second quarter numbers are going to be even worse. The general consensus among economists is that we are going to have a 30% drop in gross domestic product (GDP) in the second quarter. Some are projecting an even bigger drop. JPMorgan Chase, for example, sees a 40% decline in GDP on the way.  [Chart - U.S. Annualized GDP Growth Rate ]  I wouldn't have believed such numbers to be possible, but I also wouldn't have believed that we would all be locked in our homes for weeks either. But Guess What? The Stock Market Already Crashed The data is remarkable to look at. We need to get used to seeing information like this - earnings and economic data will be ugly for some time to come. But guess what? That is why the stock market already crashed. It is a forward-looking mechanism, and it has already priced most of this in. More encouraging is the fact that this forward-looking mechanism will price in the recovery from this economic collapse long before the economy actually gets there. So prepare yourself for nothing but bad earnings numbers - not just from the first quarter but from the next quarter as well. We know businesses have been closed for April and people have been hunkered down. Earnings can only be bad when most of the economy is closed. The stock market knows that too, and it has priced most (if not all) of it in. Instead of worrying about the economic numbers that reflect our current "shut-in" economy, take advantage of the bargain stock prices on world-class businesses that you know will be thriving a decade from now. The long-term power of those companies will not be changed by a couple of terrible quarters. And always remember that we are closer to the recovery today than we were yesterday. We will be closer again tomorrow. Good investing, Jody  [Click Here to Comment](  [Stock Legend: "This Is the Best Buying Moment in History"]( This stock guru bought Apple in 1996, Netflix in 2005 and Amazon in 2005 too. Now he says we are sitting on the ultimate buying opportunity. [Find out the details on the three stocks he is urging people to buy now.](  - More From Wealthy Retirement -   [Corporate Executive]( [Use Insider Buying to Identify Top Dividend Payers]( [Insider buying can be a helpful tool for identifying which dividend payers' share prices are likely to rise.](  [Corporate Executives in a Meeting]( [Three Charts You NEED to See Before Next Week]( [Insider trading can serve as a powerful buy signal in any market.](  [Senior Reading Newspaper]( [What Should Investors Do Today?]( [The market has had its ups and downs lately. What should investors do? Follow this wealth creation research that stood the test of time.](    [Facebook]( [Twitter](   [Have You Bought ANY Stocks Since the Coronavirus Outbreak Started?]( More than 3,500 stocks are trading at least 40% below their 52-week highs. Investors have waited 12 LONG YEARS for an opportunity of this magnitude. If you sit this one out, you'll seriously regret it. [Here's how to get started...](  You are receiving this email because you subscribed to Wealthy Retirement. To unsubscribe from Wealthy Retirement, [click here](. Need help with your account? [Click here](. Have a question or comment for the editor? [Click here]( mailto:mailbag@oxfordclub.com?subject=Wealthy%20Retirement ). Please do not reply to this email as it goes to an unmonitored inbox. To cancel by mail or for any other subscription issues, write us at: Wealthy Retirement | Attn: Member Services | 105 West Monument Street | Baltimore, MD 21201 North America: [1.855.402.3939]( | International: [+1.443.353.4057]( | Fax: [1.410.329.1923]( Website: [www.wealthyretirement.com]( Keep the emails you value from falling into your spam folder. [Whitelist Wealthy Retirement](. © 2020 The Oxford Club LLC All Rights Reserved [Oxford Club] The Oxford Club is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that although our track record is highly rated by an independent analysis and has been legally reviewed, investment markets have inherent risks and there can be no guarantee of future profits. The stated returns may also include option trades. We expressly forbid our writers from having a financial interest in their own securities recommendations to readers. All of our employees and agents must wait 24 hours after online publication or 72 hours after the mailing of printed-only publications prior to following an initial recommendation. Any investments recommended by The Oxford Club should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Protected by copyright laws of the United States and international treaties. The information found on this website may only be used pursuant to the membership or subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of The Oxford Club, 105 W. Monument Street, Baltimore MD 21201. Â