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post #1 of 27 (permalink) Old 01-25-2009, 02:52 PM Thread Starter
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Stock up on KY...Last Bush GDP report this week...

and it is not going to be pretty.

Earnings, economy - here comes 'terrible'
The week ahead: Investors gear up for a deluge of weak earnings and the biggest plunge in GDP in 26 years.


By Alexandra Twin, CNNMoney.com senior writer
Last Updated: January 25, 2009: 9:25 AM ET


NEW YORK (CNNMoney.com) -- Investors this week will face the largest batch of company report cards yet, in what is quickly shaping up to be the worst quarter for corporate profits in a decade.

The earnings avalanche will test the market's mettle. Last week, the Dow fought back after falling below the 8,000 point psychological benchmark for four days in a row. Analysts say if the Dow can hang on to this level in the weeks ahead, that's a good indication that a bottom has been set.

The biggest week for earnings brings reports from 137 S&P 500 companies and 12 Dow components. Standouts include Caterpillar, American Express, McDonald's, Yahoo, Wells Fargo and Exxon Mobil.

Only 10% of the 85 S&P 500 companies that have reported so far have topped forecasts. Another 60% have met estimates and another 30% have missed, according to Thomson Reuters.

"We're in the process of absorbing just how bad the fourth quarter was," said Bernard McGinn, CEO of McGinn Investment Management. "We had a feeling things were terrible, now we're getting proof of it. The question is 'where do we go now?"

This week also brings the latest Fed policy meeting - although it's likely to be less influential than usual since the central bankers are expected to keep interest rates unchanged near zero, said Kenny Landgraf, principal and founder at Kenjol Capital Management

Investors will also digest reports on housing, consumer confidence and leading economic indicators early in the week. The end of the week brings the fourth-quarter gross domestic product (GDP) report. It's expected to have fallen by an annual rate of 5.2%, it biggest plunge in 26 years.

"Everyone is bracing for the GDP number to be pretty terrible, but the bigger surprise could come with the housing numbers, which are also expected to be awful," he said.

Landgraf said that investors are also looking for more concrete news to come from the Obama administration this week regarding the use of the remaining $350 billion of the TARP money and negotiations on the $825 billion stimulus package.

Earnings hit hard: With 15% of the S&P 500 having already reported results, fourth-quarter profits are expected to have fallen 28.1% from a year ago, according to the latest figures from tracker Thomson Reuters.

Typically, the final number is lower than where it stands at this point in the quarter. But even if the final number is no worse than where it stands now, the fourth quarter will still rank as the biggest decline for S&P 500 profits in the 10 years Thomson has been tracking results.

Worse-than-expected reports from big financial companies such as Citigroup and Bank of America have weighed heavily on the results so far.

"It's not how many companies are missing," said John Butters, Thomson Reuters' senior research analyst. "It's the size of the companies missing and the magnitude of the losses."

Financials are currently expected to lose $12.5 billion this year as opposed to their profits of $5 billion a year ago. But financials aren't alone, with 7 of 10 S&P economic sectors due to post declines.

However, not all of the news has been bad. Last week Google, Apple and IBM reported earnings that were better than expected.

List of the weeks report in the link

Week ahead for Wall Street: Earnings, GDP and the Fed - Jan. 25, 2009

McBear,
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post #2 of 27 (permalink) Old 01-25-2009, 02:54 PM Thread Starter
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By the way, that -5.2% is about $1TRILLION scrubbed off our GDP.

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post #3 of 27 (permalink) Old 01-25-2009, 06:34 PM
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Biggest in 26 years! My God it is as bad as the Great Depression!

Wait...when was the great depression? Hmmmm...

Who's John Galt.

"Timeo Danaos et dona ferentes" - Virgil, The Aeneid, Book 2

If the Arabs put down their weapons today, there would be no more violence. If the Jews put down their weapons today, there would be no more Israel. --Benjamin Netayahu
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post #4 of 27 (permalink) Old 01-25-2009, 06:40 PM Thread Starter
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Biggest in 26 years! My God it is as bad as the Great Depression!

Wait...when was the great depression? Hmmmm...
Remember grasshopper the Great Depression was a multi year event, just like this one. The FIRST YEAR was not the worst. The years progressively got worse. The progression was a 35% drop from 1929 to 1933.

You would know that if you read first THEN typed.

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post #5 of 27 (permalink) Old 01-25-2009, 06:42 PM
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Biggest in 26 years! My God it is as bad as the Great Depression!

Wait...when was the great depression? Hmmmm...
Carter anyone?
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post #6 of 27 (permalink) Old 01-25-2009, 06:51 PM Thread Starter
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Carter anyone?
Guess again.

The tax cut of 1981 triggered the largest GDP drop since the depression. It was just too much, too quick. That GDP drop was the main reason for the 1982 tax increase. It even scared Reagan.

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post #7 of 27 (permalink) Old 01-25-2009, 08:08 PM
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What does Kentucky have to do with this?

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post #8 of 27 (permalink) Old 01-25-2009, 09:26 PM Thread Starter
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What does Kentucky have to do with this?
Haven't you heard, we're slick.

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post #9 of 27 (permalink) Old 01-25-2009, 09:41 PM
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By the way, that -5.2% is about $1TRILLION scrubbed off our GDP.
You say 5.2% is an annual rate? Does that mean they only expect a 1.3% decline for the last quarter? That really doesn't sound like a big deal to me--especially when I've seen predictions of 5%-6% declines from other "experts." If that holds true, this "recession" doesn't look very bad to me; a total of only -1.6% for the entire last half of '08.

Don't believe everything you think
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post #10 of 27 (permalink) Old 01-25-2009, 09:45 PM
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You would know that if you read first THEN typed.
Had he read first there’d be no typing.
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