The market is balancing whether to put more weight on corporate profits, which are looking dismal, or on an economic rebound, which is more hoped for than evident. Right now, even with a lack of any clear and compelling evidence of economic recovery, the market is laying its bets on the rebound.
More Quotes from John Forelli:
The market looks better than it did a month ago, yet the near-term outlook for most companies is probably worse,John Forelli
This is the time when you get profit warnings instead of earnings surprises. Once the reports start flying in next week, you typically get a lot of positive reinforcement from earnings.
John Forelli
I think some of the economic news that came out today gave people a sense that the economy isn't overheating. Worries about that had weighed on stocks of late, and certainly the bond market has indicated that.
John Forelli
But this is the time you find out if companies will come up short, so there could be a few earnings worries today.
John Forelli
We're at the point in the earnings period where we get all the bad news, because we're in the first two weeks of the new quarter. So I think there's a little anxiety about fourth-quarter earnings right now.
John Forelli
If unit labor costs are tame and unemployment comes in 'in line,' then 'the-Fed-is-pausing' camp gets a lot of credence.
John Forelli
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