Anticipating An iPhone 4 Recall And Other Links

Anticipating An iPhone 4 Recall

The Usual Fare

World Cup

  1. Gloomy says

    Ed-After the Intel and CSX announcements, do you still think probability is that stocks are headed down in the next few months?

    1. Edward Harrison says

      As I said at the beginning of last week, the market was oversold. I think we
      will really for a bit and depending on the economy we might even go higher
      afterwards. This is still a secular bear market so returns will be low.

      If the economy continues down the market will sink with it. For now though,
      it’s sunny days.

      Sent from my mobile phone

      1. Gloomy says

        Don’t you think it odd that with so many indicators going one way, corporations are apparently not seeing the same thing? Have all these data points just been wrong or do you think corporations are just not going to fess up in order to keep share price high for as long as possible?

        1. Edward Harrison says

          It is a bit odd that earnings are so much better than the economy but I think there are a number of factors which help:

          1. Companies have record profit margins in part due to squeezing costs via technology and outsourcing. Just last week, I noticed that Safeway had an electronic checkout lane, for example. These are the kinds of innovations which depress American employment and incur a one-time cost but boost productivity and profits.

          2. Companies are international so their earnings are not dependent only on US consumers. Alcoa and Intel are examples here.

          3. Companies do play games with the numbers. They want to beat numbers as their stock options depend on it. And CEOs do understand that stocks have momentum; missing numbers can break upward momentum.

          I’d like to see where the banks are starting this Friday.

  2. Gloomy says

    Thanks Ed. I really appreciate your perspective.

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