The Light is Real... and it's not a Train

by Investment U Research Team

The Light is Real... and it's not a Train

by The Investment U Research Team

This morning, Wells Fargo & Co. (NYSE: WFC) announced that it expects a $3 billion profit from the first quarter. One of the biggest banks in the country, Wells Fargo is the first big winner from this earnings season.

It’s in stark contrast to Alcoa (NYSE: AA), the world’s biggest aluminum producer, which reported lower earnings than expected.

Wells Fargo’s news has spurred a mini rally this morning, and traders are rushing back into financials. But it shouldn’t surprise anyone, really.

It’s a huge clue that there are large profits being made – the world hasn’t ended.

No doubt, there will be firms that are so severely affected by this downturn that they will have no choice but to close their doors or be bought out. But the fact remains that there are companies that are profiting handsomely.

The market is oversold, based off collective fears of a “worst-case scenario.” It’s simply not the case. And fortunately, that means Wells Fargo won’t be the last company to surprise. It’s stock is happily up 25% as of this writing.

As earnings numbers roll out next week, watch big movers like CSX Corp. (NYSE: CSX), Intel (Nasdaq: INTC) and Johnson & Johnson (NYSE: JNJ) for a better indicator of our economy’s true strength. These three companies are great barometers of technology, consumer goods and goods transportation.

A few more surprises from companies like these, and it’ll tell you the “light at the end of the tunnel” is real, and not just the train barreling towards us.

Companies mentioned in this article: WFC, AA, CSX, INTC and JNJ.

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