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Posts Tagged ‘Yum! Brands’

Friday, July 23, 2010 posted by cversace

Corporate earnings continued at a fast and furious pace this week, and we started to hear from a wider variety of companies.

Again, however, it was a mixed bag. Solid earnings and outlooks from the likes of Apple Inc., Qualcomm Inc., Morgan Stanley and eBay Inc. were offset by disappointing earnings, outlooks or both by Yum Brands, Starbucks, IBM, Goldman Sachs Group and others. This resulted in a topsy-turvy stock market, which should be expected. Not only is that one of the trials and tribulations of any earnings season, but it is amplified by where we are in the domestic economic recovery.

Or not.

While some may cut to the quick and ask, “How can he say that?” I would quickly point to Federal Reserve Chairman Ben S. Bernanke’s semiannual report to the Senate Banking, Housing and Urban Affairs Committee on Wednesday. At the heart of Mr. Bernanke’s testimony, he stated that the Fed continues to forecast moderate growth for the domestic economy this year despite a “somewhat weaker outlook.”

Mr. Bernanke went on to pronounce the outlook as “unusually uncertain.”

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With little in the way of economic data for the first part of this past week, it comes as little surprise that corporate earnings took center stage. Upbeat earnings reports and upwardly revised expectations from Alcoa,CSXIntel and others fueled a nice upward move early in the week, particularly for the technology heavy Nasdaq index. Outlooks from Alcoaand CSX suggested a better second half compared with what some on the Street had been expecting, but we need to decipher between what may be wishful thinking and what may actually happen.

To be fair, some sour notes tempered positive news early in the week. Missed expectations from Yum Brands as well as a cautious outlook from Marriott International support the notion that we are not out of the woods.

Unfortunately, it reminds me what I wrote about last week (“With doubts about the recovery, what to do?”) when I touched on reduced expectations for growth. Unfortunately, those sour notes grew as the week wore on.

READ MORE HERE