Tuesday, February 16, 2010

Are the Equity Tides Rising?

Bloomberg reports today that CEO's are more optimistic in their outlooks than at anytime in the past eight years, based on the number of companies raising their outlook compared with the number reducing their outlook. Bloomberg reports that in the current quarter, the number of CEO's increasing their outlooks was 10% compared to 4.1% who lowered. I don't think I can can conclude anything except that there seems to be an optimistic message coming from CEO's. And I guess there had better be considering the number of jobs they hacked off to improve shareholder value!

"The S&P 500 has fallen 6.5 percent since reaching a 15 month peak on Jan. 19. The losses came even as companies in the benchmark gauge for U.S. equities reported a 60 percent average jump in profits during the last three months of the year, ending a record nine-quarter streak of declines. The index pared its drop last week, climbing 0.9 percent to 1,075.51, as officials in Europe pledged to help close Greece’s budget deficit."


"Companies are becoming increasingly optimistic after more than 72 percent of those in the S&P 500 beat analysts’ profit estimates, the second-highest percentage on record, according to data compiled by Bloomberg. Confidence among chief executive officers in the U.S. is at the highest level in at least four years, a survey from the Washington-based Business Council showed on Feb. 11."

"The earnings season that began last month is the third straight quarter when more companies raised their estimates than lowered them, according to data compiled by Harrison, New York- based Bespoke. One streak of that length ended with the first quarter of 2004 and the S&P 500 gained 2.4 percent the following month. The rate of estimate increases by analysts peaked in early 2004 and declined through the rest of the year, Barclays data show."