12 Reasons To Be (Economically) Optimistic

12 Reasons To Be (Economically) Optimistic

APRIL 29, 2009, 8:44 AM ET   wsj.com

By David Wessel

Ed Yardeni, the loquacious economist offers a dozen happy thoughts about the economy “while we are waiting to see how the swine flu pandemic plays out.”

His list, distributed in his daily email to clients:

(1) In the U.S., consumer confidence rebounded during April.

(2) The percentage of consumers who say that jobs are hard to get edged down in April after rising thirteen of the previous fourteen months. This tends to confirm the recent downticks in weekly initial unemployment claims.

(3) The home price story isn’t all bad news recently. Indeed, after more than a year and a half of declines, California’s median home price finally managed a meager gain, rising 2.2% month over month.

(4) Corning is bringing back some laid off workers on stronger-than-expected demand for glass used in making flat-screen televisions.

(5) Sharp is forecasting a strong recovery in profits and sales in all its business divisions during the second half of the year.

(6) IBM said Tuesday that it will increase its quarterly dividend by 10% and will repurchase an additional $3bn of its stock.

(7) The 4/28 Financial Times reported that the high yield bond market may be starting to open up again. About $7 billion was raised in April, the highest volume since last July.

(8) The stock market held up remarkably well on Monday and Tuesday despite nervousness over bank stress tests, swine flu, and the forced downsizing of the U.S. auto industry.

(9) The first quarter earnings season is off to a good start as 64% of the 235 S&P 500 companies reporting so far have a positive surprise and all 10 sectors are beating their first-quarter forecast too.

(10) Our Fundamental Stock Market Index rose during the week of August 18 as jobless claims edged lower and the Consumer Comfort Index moved higher.

(11) Condé Nast has decided to shutter Portfolio after two years of struggle. The introduction of the glitzy magazine about Wall Street launched in the spring of 2007 marked the end of the bull market. Now its demise may mark the end of the bear market.

(12) Confidence in the Euro Zone rose in April from a record low in March. The European Commission’s economic sentiment indicator jumped up to 67.2, from a revised 64.7 in March, but remains well below its long-term average of 100. Households and firms are less pessimistic about the outlook.