MONDAY JULY 26, 2010

Fading Double Dip Fears.

UPS announces strong earnings and increases it second half forecast.  Federal Express does the same.  The major global container ship companies are scheduled to receive a record amount of new vessels this month and are returning idled ships into service to meet demand. 

Does this sound like a double dip?  After all, these companies move "things."  Someone is making a lot of things if they are shipping them!  If the economy was heading for another recession, would these companies be producing great earnings?  Maybe, as the earnings reports are backward looking.  But would the companies be upping their forecasts for the second half, particularly in our hyper litigious environment, if they had even an inkling of doubt about the second half?  I doubt it.

The Dow is up 8.29% in the month of July.  The equity market doubts it. The question is: When will the bond market begin to doubt it?  A 3% yield on the 10 year Treasury only makes sense in a double dip scenario.

POSTED AT 1899-12-30 16:48:00.0

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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