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Intel result is not boring!

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by Peter Switzer

Last night on my program, SWITZER on Sky Business, BT’s chief economist Chris Caton said he thought the S&P/ASX 200 would get to 5250 this year and he has stuck to this number for quite some time. He also said he believed in the US recovery that can make his market index call end up being right.

And this morning, when the clock ticked to 4pm in New York and the closing bell rung at the New York Stock Exchange, Chris and others with even more bullish forecasts, like yours truly, got some great news — Intel delivered a knockout company earnings result.

Sussan economics

Intel? How’s that important to me? Please, avoid a Homer Simpson “boring” moment. Well, Intel, which makes the important stuff that goes inside computers, is regarded as a bellwether company for the health of the US economy. The company is the world’s biggest chipmaker.

Remember to think about the “this goes with this, goes with this” or Sussan Economics thinking behind all of this. It goes like this — if the US economy recovers which goes with better corporate profits, which goes with rising shares prices on Wall Street and this goes with a rising Australian share market, which makes you wealthier via your investments or super, then as the hip people would say, “that’s cool”.

So Intel is important. And so are the other big reporting stories this week — JPMorgan Chase, Google, Bank of America and GE.

The Intel result

For the record, Intel beat expectations with earnings, revenue, gross margins. On top of that it presented a forecast that surprised analysts and the share price spiked over three per cent in after hours trading.

The expert analysts thought it would make $0.38 a share with quarterly revenue of $9.841 billion. However, the results were $0.43 and $10.3 billion, which is over $3 billion better than the same quarter last year. That’s progress with a capital P!

On top of that, Intel impressed with its guidance and this is the really important G-word that all the experts will be looking forward to seeing as each company reports. By adding all of the G-words from all of the important US companies you get a future snapshot of what the US economy and corporate sector might just look like.

And you make money when your snapshot of tomorrow is closer to the reality when it eventually turns up. That’s why Intel is not boring!

For advice you can trust, contact Switzer Financial Services.

Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

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Published on: Wednesday, April 14, 2010