This week is a special week in Wall Street. It's the time when the companies report their earnings for the fourth quarter. Many analysts say they are likely to rebound and may show the country is out of recession.
However, the focus will not be on how much money the companies made in the fourth quarter, but the outlook for the 2010. Observers and investors will look how the companies plant to develop sales. Everyone knows last year ended on a sharp decline.
Therefore, the bad news about last year will not surprise anyone. The bad outlook for 2010 will be a bad news for Wal Street and the economy.
According to WSJ the operating earnings for companies in the S&P's 500-stock index are expected to nearly triple on a year-to-year basis. The earnings will test the robustness of the stock rebound.
Alcoa is the first to report earnings on Monday. Rising aluminum prices may help the company bottom line. A little bit of inflation and weak dollar is not a bad new for Alcoa as it can better develop its sales overseas.
The market expects fourth-quarter results to confirm the end of the recession in the U.S. S&P 500, after nine consecutive quarters of falls demonstrated a rebound during the last stretch 2009.
While the expectations are generally positive, there is another dimension to consider. It is the comparison of this the past holiday season with the previous year's holiday season. The last quarter had the holiday season, which is characterized with increased sales and commercialization. Naturally that lifts the company performance. Comparing the 2009 fourth quarter with the 2008 fourth quarter will give the real picture whether the country is really doing better in terms of economically.
Written by Armen Hareyan
HULIQ.com
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