You know things are bad when even General Electric, the epitome of a stable and safe company, reports falling profits
. Although this decline has occurred mainly in its financial unit, it is noteworthy that even its non-financial units are doing surprisingly bad. This is particularly true as more than half of General Electric's profits come from operations outside the United States, profits that is boosted by currency effects. For example, as the euro is up 16% compared to year ago levels, the dollar profits of General Electric's European operations will be up 16% even if the profits in terms of euros are unchanged. With that in mind, the weakness of General Electric's profits is ominous.
This bearish report comes after several other similar reports, from for example Alcoa and AMD. This indicates in turn that coming profit reports during the rest of the reporting could come in weak too, which of course would be bearish for stocks.