Stock Market at New High Despite Some Big Earnings Misses

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Earnings so far: not so great, but we promise they'll be better in the second half! That's the bottom line from some companies this morning: sound familiar? The mess from Microsoft (MSFT) and Google (GOOG) is being muted by modest beats from big Industrial companies, who are all holding out the prospects of a better second half of 2013.

Take Honeywell (HON), which came right out on its slide show declaring: Order Rates Improving. It even made vaguely positive comments on Europe and said China is picking up. The company raised the low end of their full-year guidance.

Take General Electric (GE).CEO Jeff Immelt said that margins would be expanding and profits would be growing in the second half. Europe was "stabilizing." Emerging markets remain resilient.

You can even be optimistic when you miss earnings! Take Whirlpool (WHR). It raised full year guidance despite an earnings miss. Volumes in North America will be stronger than they thought.

These kinds of promises are critical for the markets right now. Why? Because the market is stretched! Think about it; we are at historic highs at a time when:

  1. Earnings are not great (up 3.6 percent this quarter),
  2. Revenues are flat,
  3. The Federal Reserve tailwind is not what it used to be, and
  4. Global economic data and, to some extent, U.S. economic data is not robust enough to instill much confidence.

So what to do? Promise it will get better!

By CNBC's Bob Pisani

  • Bob Pisani

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