Earnings Lackluster

From IBD:

Halfway through earnings season, banks are still a drag, tech firms are doing OK while the overall outlook remains cloudy.

With 249 of the S&P 500 companies reporting results, second-quarter profits are on track to decline 17.9% vs. a year earlier, according to Thomson Reuters.

"I'd rate (earnings so far) as pretty bad," said Sam Stovall, chief investment strategist at S&P Equity Research. S&P forecast a 10% drop at the start of the quarter but now sees about a 20% shortfall, he said.

Financial firms' profits are forecast to dive 85%. The consumer discretionary sector, including automakers and home builders, also is a big loser.

But excluding banks, S&P 500 earnings should rise a respectable 7.7%, Thomson Reuters said.

IBD makes a solid point -- that earnings are bad and then (again) tries to spin furiously. They mention that without financial firms things would be better.

1.) We already knew that. Thanks.

2.) Let's just not report any bad news -- or take out those parts of the statistical analysis that in some way skew numbers negatively. Then everything will be OK! This is garbage, plain and simple. If you don't like a number, too bad. In order to properly analyze the numbers we must look at all the numbers dispassionately and (hopefully) without bias. This is right out of the Business and Media Institutes's method of reporting business news -- ignore bad news; only report good news.

3.) If we were talking about a really tiny sector to the economy then ignoring the earnings reports would be prudent. But this is not a small sector to the economy. In fact, it's one of the most important areas of the economy because it provides the lubrication (in the form of money and credit) for the rest of the economy. Therefore their earnings are incredibly important and must be taken very seriously.