There’s been a lot of speculation about how our economy is faring. Are we truly recovering, or are we still facing rough seas ahead? We may finally get some hard answers in the upcoming weeks as companies post their third quarter earnings reports.
Investors are certainly ready for a return. The Dow hit a 2009 record high, closing at 9,864.94. Analysts have been revising estimates across the board. The Bank Index (BKX) surged back over 3% from a tough couple weeks, coming off the heels of a Goldman Sachs revision of the industry to Attractive from Neutral. In fact, as of last week, Financials (+6.7%) was the second-highest sector in the S&P500 to advance, following Energy (+7.5%). Furthermore, our international trading deficit fell slightly in August, as our exports increased and imports decreased. This may show that the rest of the world is also on a path to recovery, or that foreign investors are taking advantage of a weak dollar. Wholesales have also risen 1% in the U.S., which make trickle down to an increase in the individual consumer market as well.
Some, of course, are duly worried that over-anticipation of good news may backfire. If the reports are less than stellar, the gains we’ve seen will could be wiped away rather quickly. However, analysts and investors remain hopeful.
Companies reporting this week are Johnson & Johnson, Intel, IBM, JPMorgan Chase, Goldman Sachs, and GE. As a patchwork representing multiple important sectors, such as Energy, Finance, Consumer Goods, and Tech, these reports could lend valuable insight into the quarter ahead.