CSX SAYS WORST OF RECESSION IS OVER, INTEL BLOWS AWAY ESTIMATES
Tomorrow should start with a bullish tilt after two important earnings reports this evening. Intel beat analysts expectations with 33 cents in EPS and $9.4B in revenues. The company also posted much better than expected guidance (something we expect to see a lot of).
In the real economy, CSX also posted a better than expected quarter. The top line growth was in-line with expectations while EPS came in 3 cents ahead of expectations. Perhaps more important were comments out of their CEO:
“The third quarter reinforces our view that the worst of the recession is likely behind us,” said Michael J. Ward, chairman, president and chief executive officer. “At the same time, our coal business will be impacted by weak demand well into 2010.”
Although we don’t want to place too much emphasis on a handful of reports it is important to note that the expectation ratio has been forecasting this flexibility in guidance and future earnings and given the improvement in the indicator we expect the rest of earnings season to reflect this early strength.*
While these reports don’t necessarily mean the economy is out of the woods, it verifies our belief that analysts and investors in general remain far too negative about the bounce in the economy.
*We should also note that JNJ did in fact boost their guidance.
“Intel said after markets closed Tuesday that it earned 35 cents a share on revenue of $9.39 billion in the third quarter.
In the same quarter last year, Intel earned 35 cents a share on a topline of $10.217 billion.”
Look like cost cutting really help. Revenue down about 10% compare to last year. Futures just pop 7 points as of now. .Wonder how many short today?
Intel is a great example that things aren’t necessarily getting much better, but rather that the analysts and investors in general are far too negative.
I’ve been wondering…Let’s say you believe in elliot wave which is human emotion, etc etc…Could it be that people stop spending …then restart their spending again thinking that economy is stabilizing….For now, it seems to me that people are spending a bit more than last quarter. Seem like the stores has more customers now compare to last quarter. …HD used to be so empty you can run around and won’t see anybody
It’s all psychologically driven in my opinion. People might not actually be better off than they were a year ago, but it certainly FEELS like things are better (how could it be worse after all?). This drives spending habits 100%.
You know when party is over?
When consumer gets a reality check at gas station or grocery store.
This begs the question — why are interest rates still at 0% and why is the Fed continuing it’s QE program?
The economy hasn’t healed yet. As TPC said, the analysts are just too negative.
why can’t the economy heal with a 1.5% funds rate and no QE?
The rate wouldn’t be at 1.5% if the economy were growing. The fact that rates remain so low is a clear sign that the bond market expects ZERO growth for years.
FF rate was 2.0% pre-Lehman (and for a couple of weeks post-Lehman). We need to stop pouring gasoline on the fire.
Because the banks still want free money
Anyway, somebody was telling me that the sector that lead you into the recession won’t be the one to lead you out. They point to the example of the tech industries. However, the tech industries didn’t own Congress, Treasury, the FED & the printing press.
What amaze me is that I don’t see much opposition/outcry from regular Americans in regard to banks while the banks stole money in broad daylight. Where are the rally, the screaming, the yelling?I’ve seen more anger during the anti-abortion rally. I’ve seen more anger in Europe. Are we all sheep?? Sad indeed.
Because nobody bothered to ask why the hell gas price doesn’t fall to 2003 level like homes and stocks.
So what Fed said is: I am gonna rob as much as from you to repair my buddy’s balance sheet, as long as you don’t revolt.
Can someone explain what has changed in the last year? Intel reports worse year over year numbers and yet the stock market is up 60%? WTF?
better than expected or better than feared. That is the play for now.
Altera reported an EPS that was down 40% from a year ago. Interestingly, its share price after hours is within a few pennies of last year’s price.
Go figure.
Exactly, I mean I understand the idea of future expectations, but are expectations really this much better?
Things are beginning to get toppish.
Oh yeah, we’ve only been hearing that for 6 months….What proof do you have? Stocks are set to run up again in the AM.
The proof in favor of a strong recovery is equally weak….
You’ve been hearing that for 6 months, right. But you haven’t heard it from me. I never said that till today.
Well, when I see the market goes up high just to pull back strong toward the end of the days, it’s time to watch out. We’ll see if tomorrow market will be able to break the resistance level. If it did in the morning and pull back to close below 1080, that will embolden the bear.
Mkt is up almost 1% ah.
I don’t know about the technical analysis. All I know is if the market is going to rise more, it will probably rise into early November…And that’s it. Time for something for a substantial down turn. Maybe not a crash, but just a downturn.
“While these reports don’t necessarily mean the economy is out of the woods, it verifies our belief that analysts and investors in general remain far too negative about the bounce in the economy.”
i wouldn´t generalize that better earnings from multinational giants mean that the economy will bounce strongly.
just have a look at yesterdays NFIB report and see how small business still experience very hard times: http://www.nfib.com/Portals/0/PDF/sbet/sbet200910.pdf