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[tomterrific14]

http://stockcharts.c...allery.html?CGI

by Dr Joe Duarte

Shares of Celadon (NYSE: CGI) and 3-M (NYSE: MMM) are tracing negative chart patterns suggesting that not all is well with the global and the U.S. economies.
That the U.S. and global economies aren't faring well simultaneously makes sense. All the economies in the world are now linked, not just by the foreign exchange mechanism and trade but also by similar central bank policies. And central banks are all printing money as fast as they can.

http://stockcharts.c...lery.html?s=mmm

That latter fact says more than anyone seems to be paying attention to these days. Central banks wouldn't have thrown the inflation thesis out the window if they weren't concerned about deflation. In fact, Japan's caution to the winds moves of late should give us all something to think about. Japan has been in a deflationary enviroment since 1989. That's 24 years ago.

Consider that the U.S. real estate bubble, that led to a global real estate bubble, only crashed a scant six years ago. Since then, the U.S. has embarked on a Japanese style public works and stimulus course which, like its Japanese precursors, just raised the national debt with little else to show for it other than the collapse of the economy was not total, and not all at once.

So what do Celadon and 3-M have in common? Celadon moves cargo in the U.S. and Mexico. It's a big trucking firm and its stock tends to move higher when there is stuff to move around. Stuff moves around when people are buying it. If Celadon has no business, we should all be very careful.

Celadon's earnings fell 23% compared to last year's same quarter, the company reported on 4-25. It blamed the shortfall on winter storms, higher than normal levels of medical claims, and that the quarter had two fewer days than it did last year. That translated into decreases sales and less truck traffic. The company says that it has had to start a new driver school in order to put drivers in trucks.

That doesn't sound too upbeat to us. That sounds like what the stock looks like, a business in decline where it can't even seem to hire workers to do their jobs. More important is the decline in sales. This may be due to Celadon as a company, its management style, and its customers. Other shipping companies did better last quarter. Yet, Celadon was not alone in missing its earnings.

3-M is more of a global play. The company missed its earnings and revenues expectations last week and warned about the future, saying that it had expected the first quarter to be "challenging," but that market conditions were even "tougher" than the company had expected. The big hit came from weaker demand for its consumer electronic products. That's not good. 3-m's electronics include semiconductors and other items such as films used to coat television screens, laptops and cell phones. The company also bought Ceradyne, a ceramics maker that makes components for semiconductor chips and bulletproof vests for the military.

The unifying themes are similar. Fewer consumers seem to be buying things that need shipping. 3-M is a big global firm that depends on emerging markets for its growth. Celadon ships things in the U.S.

No matter how you slice it, the fall in both stocks, and the fundamental reasons given by the companies for the falls, suggest that consumer spending, all around the world is slowing. That's the take home message."

http://www.decisionp...tac/DUARTE.html