Earnings Season: Industrials Doing Well in the World Economy

I’m exhausted from watching all the earnings come in this week. Over 800 companies have reported this week.

Overarching theme:

Business is good as long as you have international exposure.

Also, the industrials have done far better than expected. This “recession” is only in the finanacials and the consumer. Manufacturing is humming along- especially if they sell overseas.

Several of the chemical company CEOs said that they aren’t seeing any slowdown in business at all. That is telling.

Of course, our economy is such a service driven economy, even if manufacturing is doing well it doesn’t mean the economy isn’t in the dumps.

The service sector is 90% of the economy. Despite all of the publicity given to Ohio and Pennsylvania and vanishing jobs- manufacturing is only 10% of the economy now.

The problem with the financials being in a crisis is that they are tightening credit on ALL businesses, including manufacturing. Its not going to help our economy to have loans called in, or lack of lending- especially to small businesses which are the bedrock of our economy.

Will the small businessman be able to get $50,000 from her local bank?

There is always the credit card option (to borrow for the business at the mega-high rates and/or play the credit card game of introductory rates etc.) but even that is being pulled in by lenders.

Lets hope the financial crisis is being contained so that the second half of 2008 isn’t a roller coaster ride for businesses.

We need manufacturing to stay strong. With the weak dollar, it’s all we’ve got at the moment.

For your stock investing, you might want to start looking at some of the old industrial companies like Crane (CR) or Caterpillar (CAT) who aren’t seeing a slowdown in business outside of North America.

The world is still open for business.