Billionaire's Portfolio

With about a fifth of the companies now reported, close to 80% have surprised positively on earnings, on an earnings growth rate of about 7%. 

If we look at some of the blue chip American brands reporting today, the year-over-year earnings growth looks solid, if not strong.  Kimberly-Clark, the paper/consumer products company, grew earnings by 5% compared to the same period a year ago.  The big conglomerate, United Technologies grew earnings by 12%.  Lockheed Martin grew earnings by 23%. 

With these three companies we get signals on three of the components of the economy:  Consumption (Kimberly-Clark), Investment (UTX), Government Spending (LMT).  The fourth component is net exports.  One of the largest exporters in the S&P 500, International Paper, reports on Thursday. 

With the above in mind, we get the first reading on Q2 GDP this Friday, which is expected to have slowed from 3.1% in the first quarter, to 1.6% (Atlanta Fed's estimate) in the second quarter. 

Remember, we talked last week about the set up for positive surprises in earnings (which we're getting) AND in the economic data.  This growth number looks like it includes an assumption of an economic storm.  But in the word's of the Coca Cola CEO today, the storm (for Q2) never arrived.

Add to that, any meltdown that might have been underway in global confidence, has been warded off by global central banks (either easing or setting expectations for easier financial conditions).