All About Earnings

<h1>All About Earnings</h1>Author: <a title="My Wealth.com" href="http://www.articlesbase.com/authors/my-wealth.com/119457.htm">My Wealth.com</a> <ul> <li>Currency Investing</li> </ul>   Well the second quarter has just come to an end and everyone on The Street is anxious to see what the results were. According to Bloomberg, stock prices in the second quarter had rebounded sharply from the previous quarter and stock indices were up the most for a quarter since 1998. Of course much of this has to do with the fact that the first quarter was one of the worst for stocks in history, but let’s not ruin a good story for the want of a few facts. Still the question remains, will the market continue to rise?     In order to see if this market has legs and can continue, we must first take look at what has been causing it to rise in the first place. Quite frankly, the only things causing this market to move up are the hope and prayer that second quarter earnings aren’t going to be absolutely atrocious!   As Bob noted in a blog last week, there’s a good probability that there won’t be enough economic data this summer to send the markets significantly higher or lower. This is going to turn the focus back onto individual companies and their earnings.  And the dreaded green shoots—will there be signs of life???   Here’s what the market needs to see out of corporate earnings in order to sustain these levels and go higher:   <ol> <li>Companies need to provide somewhat positive guidance for Q3 and beyond.</li> </ol>   <ol> <li>Have corporate layoffs allowed companies to reduce their costs enough to begin to return to profitability? Or is more job loss expected? Obviously, more jobs lost mean more difficulty for the economy in general, but this could allow companies to operate “leaner and meaner” to eke out profits.</li> </ol>   <ol> <li>The bar has been set very low for these companies so any misses in earnings will be seen as very bearish.</li> </ol>     As you can see, there is a lot riding on this corporate earnings season and the outlook right now appears to be pretty bleak. If corporate earnings can show signs of life, and companies are beginning to turn it around, then this could stabilize the markets for the next push higher.   If, on the other hand, earnings come in worse than expected, then all the rhetoric and catch phrases for economic recovery won’t amount to anything. Should the latter occur, keep an eye on the US dollar (UUP) and Japanese yen (FXY), as the flight to safety trade returns and currency investors pour out of the riskier currencies and return to the dollar and yen. We’re already seeing signs of it today with the poor Non-Farm payrolls numbers in the early session.   So earnings kick off next week with Alcoa (AA). Let’s hope that it gets started on a positive note, otherwise it could turn out to be a very long summer!  About the Author: Mike Conlon
MyWealth Instructor
<a href="mailto:instructor@mywealth.com">instructor@mywealth.com</a>
Article Source: <a href="http://www.articlesbase.com/">ArticlesBase.com</a> - <a href="http://www.articlesbase.com/currency-trading-articles/all-about-earnings-1009221.html" title="All About Earnings">All About Earnings</a>

Currency Investing

Well the second quarter has just come to an end and everyone on The Street is anxious to see what the results were. According to Bloomberg, stock prices in the second quarter had rebounded sharply from the previous quarter and stock indices were up the most for a quarter since 1998. Of course much of this has to do with the fact that the first quarter was one of the worst for stocks in history, but let’s not ruin a good story for the want of a few facts. Still the question remains, will the market continue to rise?

In order to see if this market has legs and can continue, we must first take look at what has been causing it to rise in the first place. Quite frankly, the only things causing this market to move up are the hope and prayer that second quarter earnings aren’t going to be absolutely atrocious!

As Bob noted in a blog last week, there’s a good probability that there won’t be enough economic data this summer to send the markets significantly higher or lower. This is going to turn the focus back onto individual companies and their earnings. And the dreaded green shoots—will there be signs of life???

Here’s what the market needs to see out of corporate earnings in order to sustain these levels and go higher:

Companies need to provide somewhat positive guidance for Q3 and beyond.

Have corporate layoffs allowed companies to reduce their costs enough to begin to return to profitability? Or is more job loss expected? Obviously, more jobs lost mean more difficulty for the economy in general, but this could allow companies to operate “leaner and meaner” to eke out profits.

The bar has been set very low for these companies so any misses in earnings will be seen as very bearish.

As you can see, there is a lot riding on this corporate earnings season and the outlook right now appears to be pretty bleak. If corporate earnings can show signs of life, and companies are beginning to turn it around, then this could stabilize the markets for the next push higher.

If, on the other hand, earnings come in worse than expected, then all the rhetoric and catch phrases for economic recovery won’t amount to anything. Should the latter occur, keep an eye on the US dollar (UUP) and Japanese yen (FXY), as the flight to safety trade returns and currency investors pour out of the riskier currencies and return to the dollar and yen. We’re already seeing signs of it today with the poor Non-Farm payrolls numbers in the early session.

So earnings kick off next week with Alcoa (AA). Let’s hope that it gets started on a positive note, otherwise it could turn out to be a very long summer!

Mike Conlon MyWealth Instructor instructor@mywealth.com

Rate this Article:

0 / 5 stars - 0 vote(s)

Re-Publish

Article Source: http://www.articlesbase.com/currency-trading-articles/all-about-earnings-1009221.html

Article Tags: earnings report, quarter, economy, recession, stock market, currency, dollar, yen, stimulus package

Related Videos
Related Articles
Ask / Related Q&A

Play

How to Earn SP in Star Ocean: The Last Hope

Play

How to Understand the Mark to Market Rule

Play

How to Understand Our Economy

Play

How to Understand the Mortgage Meltdown part 1 of 4

Play

How to Understand the Mortgage Meltdown part 2 of 4

Latest Currency Trading Articles
More from My Wealth.com

Forex Trading Software - What Non-Successful Forex Traders Should Know

By: Robert Woods | 25/12/2009
Most of the automated systems are called robots. It has the capability of automating the tasks that you need to do if you are in the point of investing. Obviously the simpler the system, the easier it is to use. Part of the trader's strategy is to allow the system to work.

Forex Trading Strategies - Finding Great Information Online

By: Robert Woods | 25/12/2009
The forex market is always changing, and there will never be a permanently perfect system or plan. Search online, in forums and in books. There is a wealth of free information out there.

Why Automated Forex Software is Indispensible For Successful Trading

By: Sutikno Slamet | 25/12/2009
Automated Forex software can be one of the most valuable tools any Forex trader can have. If you're still establishing your trading strategies, then using Forex software can help you to track and monitor several different currency pairings.

Which Forex Software Review Will Put the Big Bucks in My Pocket, Isn't That What It's All About?

By: Sutikno Slamet | 25/12/2009
For a Forex software review to provide valuable, comprehensive and cost effective information to the end user the most critical factor is the neutrality of the evaluator. In other words, if a site offers only one or two reviews of Forex software you have to wonder if they are really offering an unbiased review or attempting to sell a product.

Which Forex Software Has the Best Performance?

By: Sutikno Slamet | 25/12/2009
Clearly, it is vital for forex investors to only utilize the best forex trading software when they want help in making great trades and a nice profit. However, determining just which program is the best is not an easy thing to do. After all, different investors often want different features from a forex trading program.

What Forex Software Features Should Be Required For You?

By: Sutikno Slamet | 25/12/2009
Using the right Forex software will develop and enhance your foreign currency trading strategy dramatically. Some software programs allow you to learn and grow as your experience levels become more advanced, while others may only be suitable for more highly-advanced traders.

What Are the Best Functions of the Best Forex Software?

By: Sutikno Slamet | 25/12/2009
As you may already know, the specific market of the Forex software and Forex service has seen many new competitors in the last few months and years. Some are serious, some are not. And if you have been like me several months ago, I mean with a current job all day long... then searching and evaluating which Forex software performs best can be a never ending task, very time consuming, with few rewards because you it's a hard task to find real proofs of consistent profits during a large period.

What Are the Benefits of Using Forex Software to Trade?

By: Sutikno Slamet | 25/12/2009
Presently, there are many software that have been developed to make trading the money market easier removing the stress that many traders face while trading. However, some of these traders are still wondering whether it would not be better to be personally doing their trading themselves so that they would not be disappointed by this software.

14 Foreign Blue Chip Stocks With 5%+ Dividends

By: My Wealth.com | 07/12/2009 | Finance
14 Foreign Blue Chip Stocks With 5%+ Dividends The Fed model compares the forward earnings yield of the stock market with 10-year government bond yields. The model assumes that investors view stocks and bonds as competing assets and will purchase whichever asset has a higher yield, according to an article in Quarterly Review of Economics and Finance May 2009 issue.

Jobs Summit Delight!

By: My Wealth.com | 04/12/2009 | Investing
The Bureau of Labor Statistics. BLS for short. Perhaps it should just be BS? On the heels of President Obama’s “Jobs Summit”, the shockingly surprising NFP number reported showed not only a much smaller number of jobs lost (11K vs. an expected 125K) but also a revised figure from October to a drop (111K vs. 190K previously reported). I suppose this is one time that the media can use the word “unexpected” and actually be correct.

Seasonal Lows in Gold and Oil!

By: My Wealth.com | 02/11/2009 | Finance
The last week of October was something else. Heavy fiscal year-end selling for mutual funds seemed to put a damper on good news and push stocks and commodities lower. October is historically a tough month on the US market with mutual funds locking in profits on their books.

Currency Markets, Vegas-Style!

By: My Wealth.com | 21/10/2009 | Currency Trading
Let’s face it; the currency market is akin to the ultimate final table in the World Series of Poker. At that table, you have eight people sitting around, all trying to bluff one another. Some have large stacks of chips, while others are short-stacked. Some like to talk a little more than others, while others prefer to let their cards do their talking. Ultimately, there will be one winner.

Vexed by the Vix!

By: My Wealth.com | 14/10/2009 | Currency Trading
A look at whether or not the CBOE Volatility Index is too low considering the challenges facing the stock market and economy. http://www.mywealth.com/blog/post/vexed-vix

Chinese Value Stocks!

By: My Wealth.com | 13/10/2009 | Investing
Many investors look at emerging markets such as China as potential protection against falling dollars. No one wants to lose money any more after the market crash of last year, but neither can anyone afford to miss out potential huge growth ahead. Money is flying back to Chinese stocks causing valuations to rise rapidly. Are there still windows of opportunity left?

Sound As A Pound....For Now!

By: My Wealth.com | 24/09/2009 | Currency Trading
Yesterday, the Bank of England vote unanimously to leave the size of its asset purchase plan unchanged at 175 billion pounds and voted to leave interest rates unchanged at 0.5%. This is seemingly good news for the Pound in the near-term, as the currency markets are reflecting this morning with the British pound up vs. other currencies. But what is the outlook for GBP going forward?

China is No Longer an Emerging Economy!

By: My Wealth.com | 20/08/2009 | Investing
As I woke Monday morning I saw that the Asian markets, particularly the Shanghai Composite, were selling off sharply. And I thought to myself, “oh no, here we go”. My general feeling is that the US equity market is overbought as the valuations haven’t quite caught up to price. Yet the US equity markets finished the day positive. What gives?