Monday, July 6, 2009

Q2 Earnings: Front and Center

The AP reports:

Investors, whose optimism was recently shaken by surprisingly weak economic data, are now hoping companies can provide some clues about a recovery.

Wall Street's focus this week shifts from economic reports to corporate earnings announcements and forecasts for the rest of the year. After investors were rattled last week by the latest consumer and employment data, there is growing uncertainty in the market about how strong the second half of the year will be.

"From this point on, we're going to start talking a lot more about how the second quarter was and that is going to be the biggest market driver," said Scott Colyer, chief executive of Advisors Asset Management in Monument, Colo. "What we want to see is continued recovery."
Taking a look at reported earnings of the S&P 500 (both with and without financials) we see the huge drop off in earnings after Lehman failed last September, affecting ALL corporations whether they were involved in finance or not as the economy stood still.

"This economy is starting to stabilize," said Burt White, chief investment officer at LPL Financial in Boston. "The market is looking for companies to do the same thing."
Source: S&P


  1. Jake - as usual good point. The question is what happens now. In another venue I took a look at profits vs GDP growth and got some startling anomalies with Profits bubbling due to the Finance industry: the chart form is
    while the words that go with that are:

    If you want more words and a link to investment strategy a 2nd set is here:

    Don't mean to fill up the links but those data sets are taken back to 1950 and tell a much worse outlook story than is generally being reported; at least imho.

  2. never apologize about providing relevant information.


  3. The biggest factor right now is whether the US will continue losing jobs. I’m sure part of these profits coming from the big banks are due to outsourcing and other cost cutting measures, all of which usually results into more layoffs. Based on more recent data, unemployment is still rising and still at a 26 yr high, so it’s not surprising that skepticism still pervades that all these positive news won’t get the US out of a rut at least in the next year or so.