TUESDAY JULY 20, 2010

Diappointed Market

The market rallied in early July on the prospect of a strong earnings season.  The earnings season got off to a good start, with earnings surpassing most estimates.  So, everything should be copacetic, right?

Wrong!  The market has raised the bar somewhat.  Not only do companies need to meet their earnings estimates, but the market is now requiring that they achieve revenue growth.  While companies are managing to meet their earnings, they continue to do it with little revenue growth.  They are "squeezing blood from the rock."  At some point, revenue growth must materialize soon or the earnings momentum will begin to fade.

Last night, after the close, widely watched stocks IBM, Texas Instruments and Goldman Sachs all announced decent earnings numbers but poor revenue growth.  These results will make for a volatile trading today.  Fasten your seat belts! 

POSTED AT 1899-12-30 09:26:00.0

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.

RECENT POSTS

Better Unemployment Number

The "Safety of Bonds" Myth

Just like that!

Ugly August

Bright Side of Double Dip Fears

All eyes on Wyoming

Lack of Business Confidence

Are bonds forecasting a double dip?

Are rates too high?

Slowdown?