FRIDAY OCTOBER 2, 2009

Economic uncertainty heading into earning season

This morning, the unemployment report was released. 263,000 jobs were lost and the official rate rose to 9.8%.  This weaker than expected report comes on the heals of other weak economic numbers released in the few weeks.  Now the chatter will be full of "double dip" forecasts and market corrections.  Economic recoveries ocurr in fits and starts.  Seldom does the stock market go straight up without a 10% correction or two.  Indeed, after rising in excess of 50% since March, a modest correction might be just what the market needs to propel itself higher.


The economy will grudgingly improve over time.  However, the primary driver of the stock market in the near term will be the upcoming earnings season.  While a bumpy ride for the economy is expected, the earnings prognois for stocks is good.  The corporate world has spent the last year streamlining operations and reducing debt.  The corporate balance sheet is strong.  And, keep in mind, we are rolling into comparisons to last year's economic collapse.  Earnings comparisons will be easy for the next several quarters.  So, even a modest economic recovery has the potential to fuel better than expected earnings for the 3rd quarter.


 

POSTED AT 1899-12-30 13:52:00.0

KEN ENTENMANN, CFA
SENIOR VICE PRESIDENT AND
THE DIRECTOR OF INVESTMENT MANAGEMENT SERVICES

Ken is a Senior Vice President and the Director of the Trust and Investment Services at Alliance Bank, N.A. He has 23 years of investment experience and oversees the management of assets totaling $1 billion. He holds a B.S. in Applied Economics and Business Management from Cornell University and an M.B.A. from the William E. Simon Graduate School of Business Administration at the University of Rochester. He has also earned his Chartered Financial Analyst designation. He is a member of the Executive Committee of the Trust Division of the New York Banker's Association. He is also a director of the Central New York Community Foundation.

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The opinions expressed here do not represent the views of Alliance Financial Corporation and Alliance Bank, N.A. This communication is not an offer or solicitation for the purchase or sale of any security, is for general informational purposes only and does not provide personalized investment advice. When making personal investment decisions you should consult your investment adviser or rely on your own research. Copyright 2008.