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- Tune in to Chris Versace on America's Morning News....http://bit.ly/cta0IQ #economy #investing #politics
- $KOPN: Solid 2Q10 Lays the Ground for a Better 2H10 http://bit.ly/bPNFIU
- Getting ready for the July employment report http://bit.ly/aadu2D
- $IIVI Bookings for the quarter increased 120% to a record $125,985,000 compared to $57,245,000 in the fourth quarter of last fiscal year
- Big Lots 2Q revenue comparison rises http://bit.ly/cSdVvJ $BIG
- Smartphone demand drives 54% year-on-year growth in Kopin’s III-V revenue in Q2 http://bit.ly/cGKhkB $KOPN $SWKS
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Posts Tagged ‘Greece’
Despite all of the progress we have made over the past 18 months, renewed concerns over the sustainability of the tepid economic recovery are rising. Concerns about Greece and then Portugal, followed by Germany’s ban on naked short-selling and euro concerns, have pushed the stock market down in recent days.
More have fallen into the worry camp, and when it comes to the stock market, this tends to be a self-fulfilling prophecy. Adding fuel to the fire this week included a jump in initial jobless claims as well as an upward revision to those for the prior week as well as misses versus expectations for the Empire Manufacturing Index and for building permits data.
As I wrote last week, there are periods of time when we will take two steps forward and one step back. The question that many, including me, are asking, is: Is this a pause to refresh? That is, is there some healthy cooling-off going on in the stock market that would enable investors to get on board the investing train and allow them to commit fresh capital after such a strong run in the stock market from March 2009 until late April of this year?
A week ago, I along with the vast majority of investors were staring down one of the worst trading days in recent history. For those not familiar with what I am describing, on May 5 the three major stock indexes - the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite - were down several percentage points before free-falling for 30 minutes to down more than 6 percent for the S&P 500 and nearly 7 percent for the Nasdaq.
As quickly as it happened, those indexes whipsawed back to close the day being down “only” 3.2 percent and 3.5 percent, respectively. This left many scratching their collective heads as to how this happened, how could it happen again and of how can it be prevented from happening again. Concerns over Greece and more caused the markets to contract another 1.5 percent to 2 percent last Friday.
Think 20/20’s Chris Versace will appear on America’s Morning News hosted by John McCaslin to talk on recent stock market trends and economic data to decipher what it means and how investors both individual and professional should think about it.
While many investors kept one eye on the Greek financial crisis and what might have been done by Germany, the European Central Bank and the International Monetary Fund to stave off any meltdown, the other eye was on the plethora of corporate earnings both this week and last.
Assembling and understanding what so many companies report can be daunting even for the professional investor and money managers, particularly when trying to gauge the underlying strength of the domestic economy. Based on company earnings, the majority of which have beaten Wall Street expectations, it would appear that things are getting better. I can say the majority because as of the end of last week 172 of the 500 companies that make up the S&P 500 had reported their earnings and, according to Thomson Reuters, a record 83 percent of those 172 had beaten Wall Street expectations (typically 61 percent of firms exceed expectations).
What that may or may not mean about analyst expectations is fodder for another day. The real question is whether or not companies beating Wall Street expectations means that things - the economy in general, the industry in which a company competes, or that company’s position - are getting better.
The quick answer is “maybe; maybe not.”
To say a company beat its earnings makes for a good headline but, as we know, we have to dig deeper to understand how a company gets such a “beat.” There are several items we as investors need to watch out for - a gain or loss that is nonrecurring in nature, like the sale of a business or product line; an unexpectedly low tax rate that is not sustainable; ongoing cost containment that masks tepid revenue growth, and so on.
What it comes down to is breaking down a company’s income statement and understanding the moving parts that compose its revenue line, cost structure above the operating income line as well as those parts between the operating income line and net earnings. Understanding these parts lets us understand the quality of a company’s earnings.