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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About Tom Lindmark 401 Articles

I’m not sure that credentials mean much when it comes to writing about things but people seem to want to see them, so briefly here are mine. I have an undergraduate degree in economics from an undistinguished Midwestern university and masters in international business from an equally undistinguished Southwestern University. I spent a number of years working for large banks lending to lots of different industries. For the past few years, I’ve been engaged in real estate finance – primarily for commercial projects. Like a lot of other finance guys, I’m looking for a job at this point in time.

Given all of that, I suggest that you take what I write with the appropriate grain of salt. I try and figure out what’s behind the news but suspect that I’m often delusional. Nevertheless, I keep throwing things out there and occasionally it sticks. I do read the comments that readers leave and to the extent I can reply to them. I also reply to all emails so feel free to contact me if you want to discuss something at more length. Oh, I also have a very thick skin, so if you disagree feel free to say so.

Enjoy what I write and let me know when I’m off base – I probably won’t agree with you but don’t be shy.

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