What Was the Big Deal About Earnings this Week?

I don’t follow individual stocks that much nor for that matter do I pay a whole lot of attention to the stock market on a short-term basis. There are a lot of men and women out there that do it better than I can so, I rely on what a selected few have to say.

With that disclaimer, I would like to weigh in with an observation on my take on second quarter earnings. Based on the reaction of the equities markets this week, there appears to be a lot of bullishness brought on by reported earnings. I don’t understand why that is.

Based on my reading and analysis I’ve picked up from others the real lesson of this round has been that American companies are pretty good at leaning down in bad times and wringing profits out of a bad situation. The earnings of the financials were good but everyone knew that would be the case. The deck is totally stacked in their favor. The others made good money, had pretty awesome margins but are doing so on significantly reduced revenues. Moreover, most don’t seem to expect all that much in terms of revenue improvement.

I may be talking through my hat, but I don’t take much cheer out of the numbers. Real growth, prospects for profitability and overall economic recovery are only going to come when those top line revenue numbers start growing. That isn’t happening right now.

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