Coming Down With Something?
Most of the chatter in the market yesterday had to do with the swine flu. And while I hate to sound unsympathetic, so far at least, this is not an issue we need to be spending much time on from a stock market perspective. For example, there have been 149 reported deaths so far in Mexico from this ugly virus. But to put this into perspective, I heard a report yesterday that something like 36,000 people die each year from the flu, which, if my math is correct, is something on the order of 3,000 flu deaths each month. So, before you go and sell all of your stocks because of the economic mayhem the swine flu will cause, you might want to consider putting things into perspective.
Again, please don’t think me an uncaring, black-hearted sole. My point is that so far at least, this ...
Labor Pains
After lunch yesterday, I realized how nice it was that the market was actually doing very little. Sure, the Dow was fluctuating back and forth 100 points or so, but there didn’t appear to be any major violence happening for a change. So, as a colleague had opined earlier in the day, maybe we had turned the corner after all, because the market was holding up fairly well in the face of another big batch of bad news.
Speaking of bad news, there was a plethora of it yesterday. Same-store sales numbers from the nation’s retailers were simply abysmal as sales fell by 2.7%, which was the weakest showing in nearly 40 years. And in the fun-with-numbers category, if you took Wal-Mart (WMT) out of the equation, sales would have plunged by -7.5% for the month.
But the fun definitely didn’t stop there so let’s quickly run through ...
GE: Indicator or Outlier?
Here's a link to listen to an Audio Version of the report: http://PlayAudioMessage.com/play.asp?m=496904&f=PFURUR&ps=13&c=FFFFFF&pm=2&h=25
If you happened to have the TV on during Friday’s session, there was one news story that was impossible to avoid – the earnings miss from GE. And by the end of the day, I’m guessing that most investors were sick and tired of hearing every Tom, Dick, and Harry’s opinions on this issue.
So, why then is the story in the title of this morning’s missive? Because, in short, GE isn’t supposed to miss - ever. This is a broadly diversified company that normally thrives during tough times. This is a company that investors are accustomed to depending on. And this is a company that doesn’t give us nasty surprises. Well, until Friday, anyway.
The problem isn’t so much that the company missed by $0.07 or even that it guided the next quarter ...
Buffett Breeds Confidence
Here's a link to listen to an Audio Version of the report:
Warren Buffett's offer to provide a second level of municipal bond insurance to Ambac Financial (ABK), MBIA Inc (MBI), and FGIC Corp. helped the bulls gain some much needed confidence yesterday. Although the offer was hardly magnanimous and Ambac actually turned Mr. Buffett down flat, the fact that someone with deep pockets was willing to step up to the plate suggests that the doomsday scenario in the space being promoted by the bears is not likely to occur.
Our heroes in horns got some additional help in the financial sector yesterday, which helped the blue chip indices finish with nice gains on the day. In addition to the Buffett deal, investors were treated to the announcement of a mortgage lender deal, which would freeze foreclosures for 30 days while those ...
