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Investing Specialists

Companies Finally Reporting Better Economic News

After months of improving macro-level data, individual firms are getting in on the act and reporting better conditions on the ground.

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For many months, almost all of the positive signs about the economy were from high-level, macro indicators like unemployment claims and broad manufacturing indexes. Individual companies remained mum about any signs of recovery. This week, some of the firms Morningstar covers began to talk about the good news, finally providing the real world data that had been very conspicuously missing from my evidence chain regarding an improved economy.

The tidbits of good news this week come from companies across a wide range of industries including  Intel (INTC) in technology,  Tiffany's (TIF) in retailing,  Emerson  (EMR) in the industrial world and even a software company. Intel was first, as it raised its outlook and future guidance driven by strong Asian demand, new products,  Microsoft's (MSFT) widely anticipated new operating system and even more and lighter laptops. Tiffany's, in its quarterly conference call said that sales across the company were now falling at a slower rate and that some stores had actually seen increases. Our analyst on the stock, Kim Picciola, couldn't help but muse that a better stock and investment banking results might be part of the reason. Emerson, an industrial conglomerate indicated that orders were stabilizing and in some cases were showing modest increases.

Finally, a company that sells software to the auto insurance industry noted that the number of claims being filed with insurance companies was on the rise--which paradoxically is good news for the economy. First, the number of accidents correlates with miles driven that in turn correlates with economic activity. Also, in bad times, drivers are often more reluctant to file claims because then the insured must often come up with the deductible before the car can be repaired or replaced.

Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.