Look beyond Janet Yellen’s speech to Congress this week. It’s the second quarter earnings that need your attention.
Second quarter earnings reports are trickling in, and they look less than stellar, writes Jeff Miller in his blog Dash of Insight. The weak economy and strong dollar are taking their toll on corporate earnings. And poor earnings are going to effect the stock market. Stocks will need to allow earnings to “catch up,” writes Miller.
Miller remains optimistic about stocks though, writing that there isn’t a recession looming around the corner. Currency issues are stabilizing, and can be avoided with smart stock picking, he says. The trend toward stock buy backs isn’t a bad thing, he adds. They improve per-share earnings.
“I have little interest in the regional Fed surveys. There is plenty of FedSpeak in addition to Chair Yellen’s Congressional appearances,” writes Miller. Yellen will likely say the same thing she’s been telling Americans this year, that a rate hike is likely, but depends on the economy. Don’t hold your breath for more.
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