Archive for May 2014
1,900; now what?
The US stock market, the best market in the world for a multitude of reasons, hit new highs on Friday, ascending to the 1,900 level, on a closing basis. The market is confounding because of the lack of normal draw-down (no meaningful pull-backs in a long enough time to be scary) and because many high…
Read MoreBig Orange; Home Depot 1Q results soft on weather – outlook a positive signal for housing
Home Depot (HD) 1Q14 results reflect a benefit to earnings, net of tax, of $61m from a sale of a portion of the company’s equity ownership in Home Depot Supply Holdings (HDS). Exclusive of this gain, HD reported EPS of $0.96 relative to consensus estimates of $0.99. A miss in a difficult to predict quarter…
Read MoreThe widow maker trade spreads from Japan to the US
Since 1990, one trade that has always lost money, over any reasonable time period, has been the shorting of JGBs (Japanese 10-year). This trade, unique in its consistency, developed its own name; “the widow maker”. With JGBs yielding 57 bps today, the widow maker is alive and kicking. Over the past 24-year time period, JGB…
Read MoreWhole Foods proactively lowering prices; an opportunity for the patient
For a retailer, cutting prices generates a certain amount of self-inflicted pain through the P&L. The problem is rather intuitive; existing customers continue to purchase the same amount of goods at the new lower prices (hurts sales growth) and it takes time, to an uncertain extent, to attract new customers to the better value offering.…
Read MoreApril employment report; strength broadens to lower-end
This month’s job report will rightly be questioned; late-winter/early spring weather for much of the country was horrible in February and March, and this morning’s report reflects payback from depressed activity making results appear better than they actually are. Nonetheless, trends in April, and thus far year-to-date, reflect a potentially important change in labor market…
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