Quote/Graph of the Week:

Thanks to Jim McAllister and the rest of the Equity Research team at Commonwealth Financial Network I have this to offer:

In a week when the GDP report showed a weaker-than-expected U.S. economy while corporate earnings came in better than anticipated, many investors have been left wondering how to explain the disconnect between the two data points. The accompanying graph, which illustrates the share of corporate profits derived from foreign markets over the last 65 years, may hold the answer.

U.S. companies now earn almost a quarter of their overall profits overseas. As globalization continues—and the Chinese consumer, in particular, continues to have more disposable income—we expect this trend to continue. Apple’s incredible earnings results are a perfect example of how foreign sales can be such a strong driver of growth. Up until the last several quarters, China was a minimal part of Apple’s overall revenue and profits. The country now represents about 20 percent of Apple’s revenues. That number will only grow as the company expands its distribution footprint and the number of products it sells in China.