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JEREMY HOBSON: Now to the analysis of Jeff Saut, he’s Chief investment strategist at Raymond James.
Good morning, Jeff.
JEFF SAUT: Good morning, Jeremy.
HOBSON: First to some of these corporate earnings we’ve been getting. We heard from Catepillar this morning. They said stronger than expected. AT&T is looking good as well. Yesterday we got a lot of airlines earnings and they reported a solid quarter. What’s your takeaway so far from earnings season?
SAUT: As if yesterday’s close, the third quarter earnings of the companies that reported, 78 percent had beaten on the earnings line, and 58 percent of them have beaten on the revenue line. But even more importantly, fourth quarter guidance out of the reporting companies have been very strong.
HOBSON: That means that they’re looking forward to good stuff ahead.
HOBSON: Does this mean we are back on the road to good health, you think?
SAUT: Yeah I think it’s going to be a sub par recovery. You’re not going to get five-, six-, seven- percent GDP growth but I think the double dip has clearly been taken off the table.
HOBSON: What about the job market? The labor department said today that applications for jobless benefits dropped — that’s a good thing — by 23 thousand. What do you think of that?
SAUT: Well, the claims came in at 452 thousand, about three thousand better than expected, but they revised last week up by 13 thousand. It’s not really job losses that’s the problem right here. It’s the lack of hiring. A lot of companies have intentions to hire but they haven’t freed up the purse strings yet. So I think the recovery in the job market is going to be slow, and it’s going to take a long time to get back to where we were.
HOBSON: Not hiring even though we’re seeing good earnings. Well, Jeff Saut, thank you for your time.
SAUT: It’s a pleasure.
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