CSX, one of the nation's largest railroads, doesn't think the economy is headed into a double dip recession and seems fairly optimistic about the rest of the year. To me, this is probably one of the most important earnings report of Q2 because its a pure sign of the Chinese economy. With good Q2 numbers and optimism, this shows that there is no China slowdown- right now, a strong China means a more stable US economy. I was wrong in thinking that the guidance from CSX would be cautious, but this guidance makes this rally seem more believable.
Although, I now think the earnings from companies will be better than I expected, I still think you sit on the sidelines when it comes to buying individual companies ahead of their earnings reports. I think technology as a whole will do better than expected, so a good play would be to buy QQQQ. Its hard to pick the individual companies that will have a good report, but if you take a broader position, it will help to limit potential losses.
CSX 53.51 +1.05 (+2.00%) @10:00am