We have had the best market move since 1938. To sustain it we will need earnings guidance better than expectations. Currently, the first quarter reported earnings are a throw-away. Everyone knows the last three months have been terrible for business.
So, this week’s guidance of future earning is critical. Here is a partial list of companies to report: Lilly, Bank America, Lockhead, Schering-Plough, UTX, Coke, DuPont, Merck, At&T, Apple, McDonald’s, Altria, Phillip Morris Intl, UPS, Amgen, Microsoft, Pepsi, Amazon, 3M and Schlumgerger. Get the idea?
The severe upward move has caused a bit of a bubble, I believe. I am hearing comments similar to those heard in 2001, from friends and acquaintances. Knowing I trade I am being asked what platform I use, what looks good tomorrow, why shouldn’t we day-trade gold, bonds don’t look good, etc, etc. This kind of discussion leads to froth.
Overseas markets are still killing ours: YTD numbers; Brazil +28%, Chile +23%, China +18%, Indonesia +25%, Pakistan (!) +69%, Taiwan +19%.
If we get through this week without a severe correction the froth may be justified.
Sidebar
Over the years my wife, Pam, and I have probably spent thousands on our feet. I have had surgery, many years ago, on my heal. Since then we have both had steroid shots many times. And we have purchased thousands of dollars of orthotics. None of these things worked until our son, Matt, introduced us to Superfeet.com. These are the best orthotics made, bar none. We have a drawer filled with others made for us by podiatrists, costing hundreds more than Superfeet. I have a pairs for my cross-trainers, golf shoes (they don’t help my game, BTW) and my loafers. Take a look: Superfeet Premium Insoles
