Some Solid Earnings Provide Hope for Future

For a lot of companies out there, it isn’t the end of the world. I have to say that I’m fairly impressed by some third-quarter earnings results by some big companies in the marketplace.

IBM reported decent numbers, as did P&G and Kraft. Even Kellogg’s generated a 12% increase in earnings and a 10% increase in revenues in its third quarter. Corporations are pretty much saying the same thing — that they expect the economy to be more difficult over the next few quarters — but most companies are able to pass on higher raw material costs to customers.

Sure, there are a lot of problems in the economy. Automakers and auto parts suppliers are in a terrible bind right now. Financial services, including the insurance business, are in turmoil. Resource industries like oil and precious metals miners are having a difficult time because of the dramatic moves in commodity prices. And the future looks a lot less rosy for anyone in retail. Still, a lot of companies both large and small are reporting very respectable numbers with reasonable expectations for the future.

Policy makers have pretty much exhausted all their options, particularly on the monetary side of the equation. I think it’s highly probable that we’ll get some significant spending from government over the next few years on infrastructure projects. Fiscal policy is going to be where the action is in the near term and likely to the detriment of the dollar.


Just about every participant in capital markets has been humbled by the recent correction in credit and stock markets. Not only by the size of the correction but by its speed. The market still needs a lot more time to “find itself,” but I’m hopeful about the future, especially after seeing some of the solid earnings being reported this quarter.

If there’s one thing that continues to dog the stock market, it’s that the month of October is often just plain wild.