Sunday, January 22, 2012

As Earnings Season Provides Mixed Messages, Most Markets Move Higher

The second week of earnings season presented investors with more mixed views. Better than expected results came from firms such as Microsoft Corp.IBM Corp. and Intel Corp., while Google Inc., American Express Co. and General Electric Co provided disappointing results.  With 50 of the S&P 500 companies reporting fourth quarter results, average growth in revenue is 0.15% and earnings is  -10.21% (financial services providing the biggest drag on results ).   Global players reporting results this week include Apple Co., Caterpillar Inc., Chevron, Corp., ConocoPhillips, Corning Inc., Ford Motor Inc., Halliburton Co, McDonald’s Corp., Procter & Gamble Co., SAP AG and Starbucks Corp.

The Bulls suggest the global economy is “on the mend”, while the Bears have a long list of unresolved financial issues, such as the protracted debt negotiations in Greece, to consider.  With a combination of 1) low investor conviction, 2) light trading volumes and 3) swift moving markets; any sense of a problem could quickly reverse the current positive trend.  Stay tuned.

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