Return to Fundamentals
by Charles B. Carlson, CFA
Dow Theory Forecasts

Some market pundits have accused investors of focusing too much on the war and not enough on the market's fundamentals.

Actually, one reason that war news has been in focus so much is that there has not been much in the way of corporate news to draw attention.

That is about to change.

Indeed, over the next four weeks, corporations will be reporting first-quarter earnings, and those earnings will provide plenty of fodder for market movement over the next month.

Interestingly, there doesn't seem to be much optimism for corporate profits in the first quarter. Concerns about an increasingly tight-fisted consumer and skittish corporate CFOs are creating expectations of lackluster results.

However, what is most important in the first quarter is that you continue to see improvement in earnings, continuing the trend of the last three quarters.

Fortunately, I believe we will see continued (albeit moderate) improvement in profits in the first quarter.

Sure, there will be certain industry sectors and certain notable companies that disappoint.

But in total, the first quarter should not be nearly as bad as many now expect, and that should provide at least some good news for stock prices.

The BUYandHOLD website contains links to third-party websites on the Internet. BUYandHOLD provides these links to these websites only as a convenience to users of the website. Links on the BUYandHOLD website are not endorsements by BUYandHOLD, implied or express, of the linked sites or any products, services or links in such sites; and no information in such sites has been endorsed or approved by BUYandHOLD. Linked sites are not under the control of BUYandHOLD, and we are not responsible for the contents of any linked site or any link contained in a linked site. No information contained in the BUYandHOLD website or accessed through any linked site, or any link contained in a linked site, constitutes a recommendation by BUYandHOLD to buy, sell or hold any security, financial product or instrument. Information accessed through linked sites is not, nor should be construed as, an offer or a solicitation of an offer, to buy or sell securities by BUYandHOLD. BUYandHOLD does not offer or provide any investment advice or opinion regarding the nature, potential, value, suitability or profitability of any particular security, portfolio of securities, transaction or investment strategy, and any investment decisions you make will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs.