We are facing a time with great corporate earnings and a to be continued high unemployment rate. Corporations learned to work more efficient and will not rehire the same amount of people to get the job done. The economy overall is strengthening and the stock market decides day by day what news drives the market up or down.
Today, July 29, 2010 great earnings reports were continued and no change on the unemployment situation lead to a negative market direction after a start on the high side. Overall we are still bullish and here are the reasons why:
This morning the Labor Department released a report showing that jobless claims in the week ended July 24th were basically on the rate of expectation and show give or take not improvement. The rate of change is less than one standard deviation from the mean value and with that does not give any tendency. Jobless came in at 457,000 from the previous week's revised figure of 468,000. Economists had been expecting jobless claims to be at 460,000 from the 464,000 originally reported for the previous week. Overall not bettering in the unemployment situation is a clear Bearish signal and made the market sell off after a good start.
In earnings news:
Exxon Mobil Corp. (XOM) reported second-quarter net income of $1.60 per share, topping estimates that called for $1.47 per share for the period. Total revenues rose to $92.49 billion but fell short of the $98.49 billion fore cast for the quarter. Solid earnings and money for investment: Bullish.
Colgate-Palmolive Co. (CL) also revealed its financial results for the second quarter, including earnings of $1.17 per share compared to estimates for $1.16 per share. Sales for the quarter totaled $3.81 billion, up from $3.74 billion in the prior year (+1.8%) quarter but short of estimates for $3.94 billion. This is a real consumer company and it made a modest growth in a very price promotion driven market: Bullish.
Motorola Inc. (MOT) reported adjusted second-quarter earnings of $0.09 per share, just above Wall Street estimates for $0.08 per share. Net sales for the quarter came in at$5.414 billion, which beat forecasts for $5.19 billion for the quarter. Innovation counts and those who have it increase in sales: Bullish.
Japanese electronics giant Sony Corp. (SNE) reported a profit for the first quarter of fiscal 2011 compared to a loss in the same period last year. The company also raised its full year earnings outlook and maintained its revenue guidance. The signs of Sony are difficult to read, the technology leader of consumer electronics of the past has shown little to no innovation leadership in the last 10 years and restructured themselves into the positive. No real market sentiment.
Credit card service provider Visa Inc. (V) said that its third-quarter profit declined 2 percent from last year, with the drop primarily due to lower investment income. Looking ahead, the company reaffirmed its earnings outlook for fiscal years 2010 and 2011. If you do not give credit, you have no earnings. Today, credit card companies try to get 15% annual plus finance charges from their clients. This is a huge margin, considering money at 3%, but if you keep credit tight, the earnings potential gets small. No real market sentiment.
Thursday, July 29, 2010
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