Impressive Earnings To Push Stock Market Higher Through 1st June
Stock-Markets / Stock Markets 2010 Mar 18, 2010 - 11:18 AM GMTBy: Daniel_Bruno
The first quarter earnings report season is rapidly approaching. Most U.S. company news has entered a quiet period with corporate announcements at a minimum. The exceptions are companies with negative surprises, which will be rare this quarter. Cash flow and earnings have recovered significantly from the first quarter of 2009.
First quarter gains will be impressive. Earnings on a year-over-year basis by the Dow Jones Industrial Average will increase for 25 of the 30 companies, nearly 90%. The average gain will be 10.4%. Notable on the list of companies expected to report year-over-year gains in excess of 40% include heavy hitters such as 3M, Alcoa, American Express, Chevron, Cisco, Dupont, Intel and JP Morgan. The following are first quarter estimates for the Dow Jones Industrial Average.
Company Quarter 2010 Estimate 2009 Actual
MMM 1 $1.17 $0.81
Alcoa 1 0.17 (0.59)
American Express 1 0.62 0.32
AT&T 1 0.54 0.53
Bank of America 1 0.09 0.52
Boeing 1 0.87 0.87
Caterpillar 1 0.42 0.39
Chevron 1 1.68 0.72
Cisco 3 0.34 0.23
Coca Cola 1 0.74 0.65
Dupont 1 1.01 0.54
ExxonMobil 1 1.30 0.92
General Elect 1 0.15 0.26
Hewlett-Packard 2 1.05 0.86
Home Depot 1 0.38 0.35
Intel 1 0.37 0.11
IBM 1 1.94 1.70
Johnson&Johnson 1 1.27 1.26
JP Morgan 1 0.64 0.40
Kraft Foods 1 0.46 0.40
McDonald’s 1 0.96 0.83
Merck 1 0.78 0.74
Microsoft 3 0.43 0.39
Pfizer 1 0.53 0.54
Procter&Gamble 3 0.81 0.83
Travelers 1* 1.48 1.34
United Technology 1 0.91 0.87
Verizon 1 0.56 0.63
Wal-Mart 1* 0.85 0.77
Walt Disney 2 0.45 0.43
* Median: 10.4%
The Dow Jones Industrial Average is breaking out above its January high at 10729 and is targeting the 11200 area as long as 10725 holds. 50, 100 and 200 day moving averages are in sync and On Balance Volume supports the bull move. Seasonality favors higher highs: For the last 20 years the DOW has risin an average of 5% between the end of March and June 1.
The advance decline line supports higher stock prices
The S&P Index of 500 companies stocks confirms the bull. Another 15 S&P 500 stocks broke resistance on March 17 (Apollo, CB Richard Ellis, Clorox, Comerica, Gap Stores, Intel, Life Technologies, Lincoln National, Norfolk Southern, O’Reilly Auto, Simon Properties, Vulcan and Wynn Resorts) and none broke support. The Up/Down ratio increased from 3.57 to (344/90=) 3.82.
By Daniel Bruno
Chartered Market Technician
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