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A Bottom? Maybe…But a Rebound?

This was written by CNBC producer, Robert Hum

Perhaps Not So Fast.

As mentioned earlier this week, a number of companies this week have signaled some stabilization in conditions, with some even hinting of a bottom.

Here’s a brief recap –

Earlier in the week:

1) United Technologies, Coach, and Delta CEOs remark that they have seen some “stabilization” in their business conditions.

2) Honda & Seagate executives hint that sales may have hit a bottom.

3) Texas Instruments CFO saw improving demand in April.

4) JCPenney CEO sees a “more predictable trend” in its businesses.

Today:

1) Starwood Hotels CEO indicates demand appears to have reached “a plateau.”

2) Con-way CEO: “There are some signs that our freight volumes may be nearing a bottom.”

But don’t be fooled. Hitting a bottom is one step, but seeing a significant rebound in business could well be another giant step (or even a big leap) away.

With several companies slashing Q2 and/or full-year guidance this week, traders worry that any meaningful turnaround may still be further off. This could plague stocks and cause them to stay fairly stagnant – or even drift lower – over the next few months.

Additionally, some cautious comments made by corporate executives during this round of earnings have heightened concerns that a forthcoming rebound may indeed be more far off than investors would have hoped.

Earlier in the week:

1) Eaton CEO says an economic recovery is “more likely to begin in the first quarter of 2010,” one quarter later than he had previously hoped

2) UPS CFO warns that a “recovery in the U.S. might begin late this year, but more likely not until 2010”

Over last 24 hours:

1) Schlumberger CEO warns they “do not see any significant recovery in North American gas drilling before 2010."

2) Con-way CEO (who also saw volumes nearing a bottom) cautions “shipping volumes are likely to remain restrained, certainly for the short term."

3) 3M CEO predicts little “end-market improvements until at least the third quarter, or possibly even the fourth quarter.”

4) Honeywell CEO: “We don’t know exactly how long these economic challenging economic times will continue.”

5) Microsoft CFO believes "the weakness to continue through at least the next quarter."

6) American Express CEO reiterates he is "very cautious about the economic outlook."

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HOT
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UPS
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Questions? Comments? tradertalk@cnbc.com

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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