Strong Corporate Earnings and the Bear Market: How it Will Play Out - PowerPoint PPT Presentation

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Strong Corporate Earnings and the Bear Market: How it Will Play Out

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  1. Strong Corporate Earnings And The Bear Market: How it Will Play Out By- Michael Lombardi http://www.profitconfidential.com

  2. Remember this summer when the Dow Jones Industrial Average had a couple of 400-point loss days and we heard so many stock advisors and analysts tell us we were headed straight into a second recession…that corporate earnings would plummet? Stocks fell 20% from their May 2, 2011, high and all of a sudden headlines started to appear saying that we were in a bear market. • Well, these advisors and analysts jumped the gun, as most fail to understand how a bear market actually works. • Let’s take a quick look at some earnings reports from big American companies over the past day or two: • American Express Co. (NYSE/AXP) made $1.24 billion in the third quarter, up 13% from the same period of last year. http://www.profitconfidential.com

  3. AT&T Inc. (NYSE/T) reported a big profit of $3.62 billion in its last three months. • Intel Corporation (NYSE/INTC) posted a 17% profit gain to $3.47 billion in the third quarter. • Morgan Stanley (NYSE/MS) beat analyst expectations and made $2.2 billion in the last quarter. • Even beleaguered Bank of America (NYSE/BAC) surprised and reported a strong profit of $5.9 billion in the third quarter. • All told, these few companies mentioned above added $16.43 billion to their coffers in the third quarter. Most of corporate America is doing fine right now (see Three Big Money Profit Stocks). And if they start to see earning growth slow, they’ll simply cut payroll again. • America and the stock market. http://www.profitconfidential.com

  4. Where the Market Stands; Where it’s Headed: • The Dow Jones Industrial Average continues to hover at the same level it opened at in 2011. Corporate earnings reports for the third quarter of 2011 have been respectable thus far. Pessimism continues to preside amongst investors and stock market advisors. On the backdrop of continued earnings growth, I believe that stock prices will rise. • A bear market rally in stocks that started in March of 2009, although old and “long in the tooth,” as they say, presides. What He Said: • “When I look around today, I see falling stock prices…I see falling house prices…and prices for retail goods stores declining. The media has it all wrong blaming (worrying about) inflation. In my opinion, the single biggest threat to the U.S. economy and to the Fed in 2008 is deflation. http://www.profitconfidential.com

  5. http://www.profitconfidential.com