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Earnings the Economy and Prices

April 28, 2009 – 1:23 pm

This will be the last big week of earnings reports for the first quarter. There will be more in the weeks ahead but the amount of companies reporting will fall dramatically. Earnings as reported for the first quarter have been poor but surprisingly betterĀ  than expected especially in the financial sector. The real story is in the tech stocks. Their earnings have been very good in comparison to other industries. Profits are
still rolling in nicely. Qualcom and Verizon reported with Qualcom numbers coming in at the high end of forecast. Verizon grew their earnings by 5%. Much of that was from the acquisition of Alltel Corp, but they also increased their client base without the purchase.
The worst in the economic slump is over and stocks will begin to trade based on fundamentals again. Those fundamentals are weak and will only begin to improve in the coming months. However, stock prices may have hit their lows for this cycle. The market is still down for the year but things are looking up and we have had a sharp move up from the bottom. Of course there was a sharp move down for the first two months of the year with the cycle low onĀ March 9th. That low is the bottom – at least it appears that it will mark the bottom.

Good Trading,

Steve Peasley

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