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| 2009-06-05 01:29 |
REAL GOOD NEWS A DUD
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NEW YORK, NY Now I'm sure we are living in Bizzaro world. How often over the last four months have we seen the
market rally on obviously negative news? There have been countless times the market was up on the flimsiest of rationalization. We've heard about
"green shoots" and all kinds of sayings to express things were getting less bad. Even though our economy has always been cyclical this time around it
was being portrayed as just a one-way street to hell. Now, there is giddiness among economists only seen when they visit the Slide Ruler Hall of Fame.
The thing today is that there isn't the kind of giddiness one would have expected from legitimate good news. This market should be significantly
higher. It's not, however, and that is a red flag.
Word on the floor is that the numbers simply don't add up. I've seen bifurcation between the
Household Survey and the Establishment (business) Survey but there was an unpleasant smell about this number right out of the gate. A few analysts on
the research desk were commenting that the numbers just seemed fishy. When the market didn't surge (I'm talking 250 Dow points) I was concerned. I'm
not sure if there is anything to all of this but the 9.4% unemployment rate is hovering atop the market like an ominous cloud. I thought the Street
could write that off, there were only 347,000 jobs lost, after all. There is still a chance the market could catch a bid and rally into the close. One
thing that I learned today, however, is that there is underlying fear...and that's great news.
Afternoon Notes from WSS Research Desk
Brian
Sozzi
* As I expected coming out of the 1Q earnings report in mid-May, Wal-Mart (WMT) announced another whopping share repurchase program
today at its annual meeting. Following up on a $15.0 billion program from 2007, the company enacted the same dollar amount for a new program. This is
on top of a 15.0% increase in the annual dividend announced yesterday. Remember, back in 2007, when the company decided to put free cash flow to
greater use the stock began a strong advance. In my opinion, the stock is very attractive for a core portfolio holding as I believe Wal-Mart will
retain the customers it gained during the recession.
* We are hitting it out of the park with our institutional research reports. If you are
unaware of our work in this arena, which consists of in depth equity research reports, please contact your representative. Today, shares of Guess
(GES) are powering higher following a better than expected 1Q09 earnings number. The earnings figure, which surpassed consensus by $0.05, was in line
with our forecast (note we are part of the First Call consensus); we raised our rating in early March...the stock has since doubled in value.
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Disclaimer: Securities Operations Forum is providing this research to assist investors in determining when to buy and when to sell. All investment decisions are yours and as a result you could make or lose money. Securities Operations Forum, its employees and/or its affiliates and family members may from time to time take positions in the open market or otherwise with respect to the securities discussed, but not have stock ownership equal to or greater than 1% of the outstanding stock of the covered company nor does any employee of Securities Operations Forum sit on the Board of Directors of any covered company. The statements made herein include information obtained from sources believed to be reliable, but no independent verification has been made and we do not guarantee its accuracy or completeness. The statements made herein contain general information and do not constitute an offer to buy or sell any security. |
