Much of the recent optimism in the market has been based on the slowdown in the general decline of the economy.  Not surprisingly, earnings have shown tepid signs of troughing as well.  The WSJ cites multiple different sources who are calling for a bottom or signs that a bottom might be near.

United Technologies Corp., maker of Otis elevators and Pratt & Whitney jet engines, said Tuesday its first-quarter income fell by a quarter, but that the overall rate of decline in orders is slowing. While orders are still down, “they have stabilized across the businesses,” CEO Louis Chênevert said. “For the full year, we still expect a better back half.”

His words were considerably less upbeat than those of Paul Otellini, CEO of Intel Corp., AMD’s chief rival, who said last week he believed “the worst is now behind us.” Intel said revenue should be more or less flat in the second quarter, a period that’s usually slightly slower than the first.

Michael Darda, chief economist at Greenwich, Conn.-based MKM Partners, says the early indicators are “essentially pointing to a reversal in the economy sometime later this year.” He cited lower interest rates for corporate bonds, a sign that companies’ debt is perceived as less risky; calmer credit markets; and a rebound lately in industrial-commodity prices, reflecting an uptick in demand from manufacturers.

Personally, I am not seeing it.   The economy was knocked flat on its behind in Q4.  It was impossible for things to continue to deteriorate at that rate.  In case you’ve forgotten, the economy actually stopped functioning for almost an entire month in October and November.  The mild sequential improvement/stabilization is not a sign of strength, but rather a sign that the likelihood of a W or L shaped recession is very high and that any recovery is likely to be very weak.