Stocks moved sharply ahead in an earnings-driven market, with investors biting their fingernails and sitting on the edge of their seats as conflicting reports on the twin deficits were breathlessly reported by on the scene reporters. Approximately 3/4s of the earnings are judged to have come in better than expected. This, of course, is a bit of a game whereby companies drive down expectations so they can exceed them. A number of big name technology companies exceeded earnings expectations, gave good guidance, and predicted increasing margins. The darling of them all, as usual, was Apple Computer. Visit an Apple Store and you'll know why.
Driving the earnings for a number of companies was business outside the U.S. and especially in emerging markets. We should be OK as long as China continues to grow in excess of 9%. We love them, even if they are copying the Apple store. U.S. companies getting growth from outside is a theme that will likely be with us a while. Everything's going mobile. People have an insatiable need for laptops, tablets, and smart phones all over the globe.
Banks also did well. To listen to their CEOs, they are actually on the verge of lending. The CEO of Caterpillar Tractor gave a blistering overview of Congress. Companies are waiting for trade agreements to be passed that would result in hiring by companies like Caterpillar. But, as we all know, Congress is too busy to be working on legislation that could improve the job picture.
Reports out of Europe seemed to satisfy investors. We are in a "kick the can down the road" (KTCDTR) environment, and that's what they did apparently with the Greek debt issue. Speaking of KTCDTR, investors hung on every report coming out of Washington on the debt limit crisis. Depending on when you tuned in, it was "close to a deal," "never close to a deal," "talking about $3 trillion in spending cuts with no tax increases," etc. etc.
In case you were on another planet, you don't have to feel bad. The ongoing 3-ring circus will likely continue as this week we get many more earnings reports - the energy sector et al. - and we move closer to the cliff's edge debt limit deadline of August 2.
All of this and 115 degrees outside. Great!
Thoughts and observations for those investing on their own or contemplating doing it themselves.
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Saturday, July 23, 2011
Wild Week on Wall Street - KTCDTR
Posted by Robert Wasilewski at 6:35 AM
Labels: Economic data
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I am just dumbfounded by all the political bickering that endangers your average American citizen if a deal is not reached. I just don't get it frankly!ReplyDelete
The market might be in for a sell off this week as the deadline comes closers. This might be a great buying opp as I just cannot imagine the US actually defaulting and inflicting on itself a crisis worse than 2008!
If you could figure it out it would mean you have something seriously wrong with you. The American political system is breaking down. The Greeks (of all people!) said it thousands of years ago = there is no correlation between being attractive, articulate,having vote attracting capability and governing wisely. All of this craziness proves how right they were.
I for one am voting across the board against incumbents in the next election and urging others to do so as well.
At first I thought that is a strange stock symbol!:)ReplyDelete
But yes, the solutions are all geared towards the next quarter or the next election. Whatever happened to long term vision?
re: MoneyCone Actually, spelled out, it would probably be a good name for a political blog :)ReplyDelete