Intel: Indicator of Corporate Earnings Recovery?

As we review the earnings report from Intel we believe the report is a clear indicator that corporate earnings will rise faster and recover more quickly than the overall economy. The Intel earnings report is a significant indicator that companies in certain sectors will show earnings growth exceeding analyst estimates.

However, it is important to recognize that the backdrop of the overall economy has not changed in the last 24 hours. In fact, we believe that we have more pain in the form of lower corporate earnings to come.

On July 6, 2009 we spoke of Lowe fs’ expectation of a market retrenchment in the range of 5% to 10%. We still believe near term vulnerability remains. It is our expectation that the Intel earnings report will be a shot in the arm of the market. However, a dose of reality could quickly set in and any stock market rally could lose steam.

The Intel report may have simply deferred a stock market correction but this is impossible to predict with certainty. Although one cannot extrapolate Intel across the board, it could be an indicator of what will be unfolding in the 3rd and 4th quarters of 2009.

The most significant aspect of today’s news for us is the indication of anticipated future earnings growth by Intel. While we remain cautious about the current environment, our future optimism about corporate earnings is growing. Corporate earnings will likely recover faster than the economy.

Earnings which are positive and exceeding analyst estimates would be seen as a healthy indicator for the market to mount a sustainable recovery.

Fair Fund Distributions

Some Lowe fs clients may be receiving a distribution from the Alliance Capital Fair Fund Distribution or Bear Stearns.

If you receive a check please do the following:

1. Determine if the check is an IRA or taxable account. Typically, an IRA will say FBO or IRA account.
2. If the check is an IRA do not cash it and do not endorse it. Please forward it directly to your Fidelity IRA account where they should treat it as a rollover. If you need help determining if your check is an IRA or a taxable account please call Lowe fs and we would be pleased to assist you. To send IRA checks to Fidelity the address is:

   Fidelity Investments
   PO Box 770002
   Cincinnati, OH 45277-0075

   NOTE: Please put your account number on the check and include a memo instructing them to deposit the check as a rollover into your IRA. If you are not sure what your account number is please call Lowe fs and we will provide it for you.

3. If the check is NOT an IRA please read the tax notice included in the mailing. We recommend you save this information and provide it to your tax preparer. Do not send the check to Fidelity. The best option is to deposit the check into your bank account.

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Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice. Not all portfolios are actively managed. If you have a question about how your account is being managed please contact us. Generally accounts less than $150,000 are not actively managed.

Important Disclosures

• Not all portfolios are actively managed. If you have a question about how your account is being managed please contact us.
• No diversification can completely protect against market risk or other risk factors with investing. A diversified portfolio could still lose money.
• An Index is a portfolio of specific securities (common examples are S&P, DJIA, NASDAQ), the performance of which is often used as a benchmark in judging the relative performance of certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. Past performance is not indicative of future results.

Foreign investing carries additional risk such as currency risk, political risk and different accounting standards.

*Lowe fs is a registered investment advisor.