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Technology is a Leader

July 21, 2009 – 9:18 am

The earnings parade will continue this week as the second quarter reports hint at maybe not a recovering picture but a picture showing the potential for recovery. There are pockets of strength, one of which seems to have emerged in technology as Intel and other chip makers reported solid numbers with upbeat projections for the rest of the year.

Technology is a leader in coming out of a stock market slump. Usually banking is a co-leader and there was surprising strength last week from some of the largest banks. The smaller banks and those that had no commercial banking tied to Wall Street are having a harder time of it.

What we need to see is earnings improving both in the bottom line and spreading to a wider group of industries. We are still at a very delicate stage where we can not use the word recovery. However, we can say that we have seen the worst of the economic slump, at least for this cycle.

The leading economic indicator report for June came out this morning which showed a better than expected rise of .7%. The expectation was for a rise of .5%. That number was not as good as the prior two months where it rose above 1% and 1.3% but as the stock market is one of the components of this report it dragged the index down in June. All in all it was a very good report and bodes well for the future.

Good Trading
Steve Peasley

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