Earnings Update

All the bearish analysts were coming on t.v and in the news saying that the stock market was going to a huge dip because earnings were going to be so bad that firms would not be able to come close to expectations. The market will never bottom until earnings expectations come down far enough where companies can beat them. Well, it seems that time has arrived. So far of the S&P 500 companies, around 60% have beat the earnings estimate. Revenue has really taken a hit, and it many cases companies are not living up to the revenue expectations, but the important thing here is that the companies are becoming more efficient. Their eps are beating expectations because of cost cutting measures, and that is what you want to happen in a recession. You want consolidation and you want companies to cut excess costs.  Now, also along with the earnings, we have been seeing pretty good guidance. The overall tone has been either that sales are going to improve this year, or that at worst we have already seen a bottom.

You can take a look at some of the earnings companies have posted at CNBC.

Earnings Update

Here are today's earnings reports:

• Caterpillar missed its earnings per share estimate by 23 cents and reported a profit of $661 Million compared with a profit of $975 Million a year ago.
  
  
• American Express missed its earnings per share estimate by 1 cent and reported a profit of $172 Million compared with a profit of $831 Million a year ago.
  
  
• McDonalds beat its earnings expectation by 4 cents a share and reported a profit of $985.3 Million compared with a profit of $1.3 Billion a year ago.
  
  
• Amgen missed its earnings per share estimate by 1 cent and reported a profit of $961 Million compared with $835 Million a year ago.
  
  
• Texas Instruments beat its estimate by 9 cents a share and reported profits of $107 Million compared with $756 Million a year ago.
  
  
• Kimberly-Clark missed its earnings estimate by 2 cents a share and reported a drop in profit of 8% from a year ago.

A Few Important Dates

I hope everyone is enjoying their weekend! I just wanted to post a few important dates that are coming up which should move the markets. These is for the week of Jan 26th-30th.

On Monday we will see existing home sales figures. McDonalds, Caterpillar, Tyson Foods, and Kimberly-Clark all report earnings before the bell. Texas Instruments and Amgen both report earnings after the bell.

On Tuesday we will have the consumer confidence number out. Dupont, Verizon, AK Steel, Peabody Energy, EMC, Badger Meter, US Steel, Nucor, and Valero Energy all report earnings before the bell. Yahoo, Sun Microsystems, Gilead Sciences, and Norfolk Southern all report earnings after the bell.

On Wednesday we have the Federal Reserve rate decision and the mortgage applications number from the Mortgage Bankers Association. Pfizer, Boeing, ConocoPhillips, AT&T, Wells Fargo, Hess, and the New York Times report earnings before the bell. Starbucks, Qualcomm, Boston Scientific, Boston Properties, and Ameriprise Financial all report earnings after the bell.

On Thursday we will have durable goods numbers and new home sales. 3M Company, Altria, Fortune Brands, Auto Nation, Celgene, Starwood Hotels, Eli Lilly, AstraZeneca, Colgate-Palmolive, Occidental Petroleum, Wyeth, International Paper, Raytheon, and Sony all reporting earnings before the bell. Amazon and Monster report after the bell.

Finally on Friday, we have University of Michigan's Consumer Confidence Index. Proctor and Gamble, Honywell, Cheveron, Simon Property, and Gannett all report earnings before the bell. Exxon Mobile reports earnings mid-day.

These earnings will be horrible, and end up sinking the market next week. We should re-test, if not break the previous November and October Lows we had. It is not a good idea to invest in the market next week, wait for the new low in the market to come where you can find better bargains.

Also very IMPORTANT: On FEB 6TH unemployment numbers for the month of January come out.