For Investors: Economic Indicators -- A Recession? What Recession?

For being in the middle of a recession with folks talking about a double dip, it sure is interesting to note a few things.

1.  Rail shipments rose 11.8% in June.

2. The Port of Los Angeles had the busiest June ever -- in the history of the port -- last month.

3. Corporate earnings: As reported earlier, Intel, Yum Brands, CSX had blow-out earnings in the second quarter. The earnings season has just started and I have not seen one story where a company or a CEO warns that expectations may have to be lowered. Not one story.

But lots of other stories. Earnings (StreetInsider.com).

2nd Quarter, 2010, Earnings, Selected

• Intel: best quarter in a decade; blows away estimates
• CSX: income up 22%; beats street's consensus
• Yum: beats estimates; revises up 3rd quarter
• GE: ends slump; 16% profit growth
• Citi: misses analysts' expectations; loan losses pared
• Bank of America: beat expectations; income up 15%
• AMD: income up 40%; comfortably beats; 3rd qtr to be higher
• Mattel: income more than doubles; $50 million vs $20 million year ago 
• Gannett (USA Today, others): income almost triples; shares plunge in price 
• Halliburton: profits soar 83%; beat expectations
• Hasbro: profits up 11%; beat expectations
• IBM: earnings up; beat expectations; sales disappoint (yeah, it's a recession, remember?)
• TI: earnings triple (per share); sales rise over 40%; in-line with expectations; shares tumble (scary, huh?)
• AAPL: blows past expectations; after-hours, shares pop significantly; they will be talking about this for days; Steve Jobs has to be one happy man -- good for him 
• Morgan Stanley: profit jumps; easily beats expectations 
• Wells Fargo: profits up 12% 
• US Bancorp: profits quadruple -- yes, quadruple; blows away expectations
• Juniper Networks: profits, sales surge
• Starbucks: profits surge 37%; all those unemployed with extended benefits have time for coffee? Starbucks once thought dead as an investment; stimulus dollars must be working
• Netflix: profits surge 34%; blows past estimates; more customers than ever; all those unemployed with extended benefits have time for movies for first time in life; what recession?
• Eli Lilly: profits jump 16%
• Medco: profits up 14% on new business
• Roche: half-year profits up 37%
• T: Stodgy ATT beats expectations; profit climbs 25%; very, very impressive
• CAT: Earnings up 91%; heavy equipment for mining, infrastructure and energy
• UPS: posts higher quarterly profits (do not confuse with USPS which is losing money and going to raise rates. Again.)
• American Express: Profits triple.
• Ford: huge profit; beats expectations, earns 68 cents/share vs loss of 21 cents/share last year
• Verizon: beats expectations
• McDonalds: beats expectations
• Schlumberger: profits jump 33% on robust drilling
• Enbridge Partners: profits beat by 14 cents; huge
• Lockheed: earnings up 12%; ups guidance
• Norfolk Southern: earnings surge 59%
• ConocoPhilips: earnings more than doubles
• XOM: a blowout quarter; earnings more than double
• Colgate-Palmolive: earnings up 7%
• Chevron: income triples; easily beating forecasts
• HSBC: profits more than double; profits "soar"
• Coach: profits soar; up 34% -- yes, a consumers product company
• CBS: beats consensus; earnings up 11%
• Priceline: earnings up 13%
• Devon Energy: earnings up 125%
• News Corp (Murdoch): surpasses consensus
• Allstate: blows away earnings consensus, 81 cents vs 69 cents
  

Having said that, it's not rosy out there. Consumer prices have dipped for the third consecutive month. Some consider that a "bargain" for consumers, but stagflation/deflation is a real concern by some. For me, it makes my high dividend / high distribution shares look all that much better.  With consumer prices dipping, it is surprising how well the 2nd quarter earnings numbers have stood up and many companies are revising upward their 3rd quarter estimates. On a day that the market sells off by more than 1 percent, AAPL rebounds a bit.

Note: it is expected that the administration's moratorium on drilling will damper the prospects of companies like Halliburton in the 3rd quarter.