The Economy Is Back! (CSX, F, IBM, VMW, INTC, YHOO)

Earnings season really kicked off yesterday, with superb reports from CSX CSX, IBM IBM, VMWare VMW, Intel INTC and even Yahoo YHOO. If, and this is a big if, the rest of earnings season goes as well as yesterday did, then we can officially say that the economy is back, and that the end of monetary stimulus can end in June as scheduled, and we can start to move back towards a more normal economy. Any of these names can be traded today for a long trade, as all the names are gapping up in pre-market trading. The three most important names are CSX, IBM, and Intel. CSX is important, as the Florida-based railroad company showed strength in all of its operating segments, especially autos, which were up 20% year-over-year. This should benefit names like Ford F, General Motors GM and American Axle AXL. The company reported earnings of $1.06 per share on revenues of $2.8 billion. Wall Street had been expected earnings of $1.04 per share on $2.74 billion in revenues. CEO Michael Ward was on CNBC this morning, and said that capex spending will rise to $2 billion this year, which is important, as it shows that the rails continue to invest in the U.S., which can only mean jobs and a strengthened economy. IBM showed robust growth, reporting earnings of $2.41 per share, excluding items, on revenues of $24.46 billion. This compared to Wall Street estimates of $2.30 per share on revenues of $24.02 billion. Probably the most surprising report was Intel, which reported blowout numbers, and continued to maintain a low teens growth rate for PCs, which some on Wall Street said was way too optimistic. Intel reports earnings per share of 59 cents on revenues of $12.9 billion, whereas Wall Street expected 46 cents per share on revenues of $11.6 billion. America, if these results continue, it proves we are officially back. It's been a long time since anyone could say that, but it's the truth, and it feels good to say it.