George Brooks: Q1 Earnings Expected to Increase 13 Percent - Smaller Stocks Heating Up, Nasdaq Catching Up

George Brooks  |

S&P 500 Q1 earnings are expected to come in at +13 percent versus a year ago with a rosier 2011 outlook than originally forecast shaping up.

There’s the answer to the question I raised yesterday regarding the intensity of the stock market in recent days in face of numerous uncertainties and the market slicing through overhead supply levels.

The stock-index futures are strong going into the opening bell, suggesting the possibility of new bull market highs in the DJIA today. The Nasdaq Composite and Russell 2000 were stronger yesterday than the DJIA and S&P500, indicating a swing to more aggressive investing.

Brooksie’s Daily Stock Market Blog: An edge before the market opens.

Friday, April 1, 2011 9:24 am EDT

DJIA: 12,319.73
S&P500: 1325.83
Nasdaq Composite: 2781.07
Russell 2000: 843.555

I have urged caution for several days as the market entered an area where the stock market broke down in February and again in early March (resistance, overhead supply). Usually such areas offer more resistance, especially after the market has risen sharply.

While I would have looked more intuitive if I said, bet the ranch, I think money can be made without exposing oneself to great risk under certain conditions, the current notwithstanding.

The expectation of strong Q1 earning reports is driving stock prices, as well as continued better-than-expected economic reports.

Chicago’s Institute for Supply Management (ISM) remained at lofty levels as of March 11 at 70.6 vs 71.2 in Feb., reflecting solid manufacturing and non-manufacturing activity in the Chicago area.

A comparable ISM report for the nation comes at 10 o’clock today.

Following yesterday’s 6,800 drop in jobless claims was today’s Employment Situation and Unemployment Rate reports. Both made good reading with March payrolls up 216,000 and an unemployment rate of 8.8%.

George Brooks

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