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Look Out For Positive Surprises
by Charles B. Carlson, CFA
Dow Theory Forecasts

The "pre-announcement" season - the period of time just before earnings are announced -- is in full swing. And, interestingly, it has been fairly quiet thus far.

That is potentially good news for stocks and the market. Indeed, what the dearth of pre-announcements may mean is that companies are expecting to at least meet earnings estimates for the second quarter.

And, it is even possible that companies may surprise by having results that exceed expectations.

Keep in mind that corporate America is in a very conservative mode these days when it comes to projecting anything about earnings. Thus, it is quite possible that they have been projecting results on the low side so that they don't disappoint. That conservative forecasting lays the groundwork for upside surprises not only in the second quarter but also the second half of the year.

Thus, if you are looking for a potential catalyst to jolt this market out of its doldrums, it might just be better-than-expected earnings.

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