Tags: Larry Kudlow | companies | government | economy

Kudlow to Moneynews: 'Government Has Been Obstacle to Economy'

By    |   Thursday, 27 June 2013 06:19 PM

Corporate profit growth may be slowing, but companies are still showing impressive skill in boosting their earnings and surmounting the government's negative effect on the economy, says Larry Kudlow, host of "The Kudlow Report" on CNBC and a Moneynews Insider.

"Profits are the mother's milk of stocks," Kudlow said in an exclusive interview with Newsmax TV. And the outlook for annual profit growth has slowed to 5-6 percent, he said. Combined with higher interest rates, "that's going to hurt stock valuations."

Sluggish revenue growth — stemming from global economic weakness — is behind the profit slowdown, the Newsmax columnist notes.

Watch our exclusive video. Story continues below
.



Editor's Note: This ‘Third War’ Will Be the Most Destructive in History, Warns Pentagon Adviser

But the good news on the earnings front it that companies have been very clever in increasing productivity and cutting costs, Kudlow said.

"The question is how clever can these companies be? Will they be able to execute at lower costs and keep their earnings margins reasonably decent?" he said.

"I can't answer that question, but I'm pretty confident because going back four years, the reason we have any growth at all is the resilience and cleverness of American businesses."

It's certainly not thanks to the government, Kudlow said. "Government has basically been an obstacle to the economy."

Companies have large cash hoards, he points out. "They're making good money, their balance sheets look pretty good. They've de-leveraged," Kudlow said. "So that's why I don’t want to be overly bearish" on stocks.

More from the exclusive Newsmax TV interview:

• Kudlow to Moneynews: 'I Don't Want to See the Fed Get Aggressive'

• Kudlow to Moneynews: 'I Would Be Very Wary as an Investor'

• Kudlow: GOP Must Become 'Welcoming Party' to Immigrants

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Headline
Corporate profit growth may be slowing, but companies are still showing impressive skill in boosting their earnings and surmounting the government's negative effect on the economy, says Larry Kudlow, host of The Kudlow Report on CNBC and a Moneynews Insider.
Larry Kudlow,companies,government,economy
329
2013-19-27
Thursday, 27 June 2013 06:19 PM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved