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<\/a>The pharmaceutical industry isn\u2019t particularly a favorite of individuals, but many of the large players within it make for excellent retirement holdings. With high yields and good visibility, a large pharmaceutical company is a welcome addition in equity market portfolios.<\/p>\nPfizer Inc. (PFE) represents the typical performance we\u2019re seeing from many corporations. The company<\/a> beat on earnings, missed on revenues, and reaffirmed full-year guidance.<\/p>\n Second-quarter sales dropped seven percent to $12.97 billion, of which three percent was due to foreign exchange.<\/p>\n The company had a major gain in earnings, but income from continuing operations was $0.50 per share, up 28% from $0.40 a share.<\/p>\n On the face of it, the company\u2019s lack in top-line growth was a disappointment. But in the stock market, things are always relative, and the stock still went up on what can only be described as weak earnings news. Pfizer is currently yielding 3.3%, with a price-to-earnings ratio of approximately 14.<\/p>\n Another company that announced disappointing results was E. I. du Pont de Nemours and Company (DD), or DuPont, whose share price was particularly strong in July.<\/p>\n DuPont\u2019s second-quarter sales dropped one percent to $9.8 billion. Once again, the company\u2019s agriculture division was the strongest with an 11% increase due to seed price gains and volume growth in corn and insecticides. Two-thirds of the company\u2019s other divisions experienced a drop in business.<\/p>\n Earnings<\/a> also fell to $1.03 billion, down from $1.17 billion in the second quarter last year.<\/p>\n So as you can see, there really is a trend of lackluster numbers, but stock market-wise, these blue chip<\/a> positions aren\u2019t coming apart. The monetary expansion is helping with an earnings multiple expansion, but from my perspective, I wouldn\u2019t be buying these lackluster results.<\/p>\n Some corporate earnings have been solid among big brand names. A pharmaceutical holding is definitely a worthwhile component in a balanced equity portfolio, but it very much continues to be a zero-growth environment for many companies. Mature companies, despite significant cost controls, just can\u2019t grow their businesses. (See \u201cEarnings Reports Masking the Rest of the Equation: Risk Remains High<\/a>.\u201d)<\/p>\n The stock market is very much a hold near-term. The mediocrity in company earnings is just more ammunition for the case for a cyclical recession.<\/p>\n I\u2019d really like the stock market to experience a meaningful pullback before investors consider taking on new positions. It might take a full-blown recession to make this happen. The market\u2019s been due for a major correction, but the Federal Reserve has been just too accommodative.<\/p>\n I feel that many individual stocks are well ahead of their own specific fundamentals. Anything is possible in a market like this, but I wouldn\u2019t be buying it with the numbers we\u2019re seeing now.<\/p>\n It can still be the beginning of a secular bull market in stocks, with the equity market very much a leading indicator. But company earnings right now are not strong enough. It really is a Fed-maintained equity market.<\/p>\n