Thursday, January 14, 2010

1/14/10 Midday Report: Market taunts macroeconomy, tells it to go back to its room until it comes out with a better number

The macro news today mostly missed expectations, but the market seems to be shrugging it off like an alcoholic shrugs off a jagermeister induced hangover (and that is by taking a massive dump and then getting back on the wagon).  Retail sales were down .3% for the month of December, while expectations were for a .5% rise.  The decline was led by consumer electronics sales which were down 2.8% as people remain happy with their 6 month old iPhones.  Economists are now hoping that the introduction of Roxxxy will help stimulate electronics sales in the coming months (bad puns completely intended).  Of course the main driver of the decline in consumer spend is that people still don't have jobs.  11k more people filed new claims for unemployment last week over the previous week, raising the number of newly employed to 440k which is almost the population of Wyoming or the number of movies from 1985 starring Ron Jeremy (and Money McBags maintains the tour de force known as Snatchbuckler has been overlooked by critics for way too long).  The slight positive is that the four week average is trending down so as long as you chalk up the current weekly claims to volatitily and not a new trend, employment may be headed in the right direction, or at least not down.

One other interesting macro note is that business inventories rose for the second consecutive month, ticking up .4%.  This is interesting because inventories could be moving back up just as consumer spend starts trickling back down.  Since we know companies are as good at managing inventory and predicting future sales as Louisiana is at building levees or NBC is at running late night talk shows (and for the record, Money McBags was a fan of Conan O'Brien until he neutered himself to take over the Tonight Show), it would not be surprising to see the US reach excess inventory levels once again (cough, WGO, cough) if the job market remains as bleak as Octomom's vagina (seriously, you put 8 kids through one of those and nothing good can happen).  The economy seems to have reached an inflection point as the magical supply and demand curves try to stop shifting and meet a happy equilibrium (and hopefully not a prisoner's dilemma non-pareto equilibrium), but there should be a concern that businesses build inventories back up too much and thus the recession falls back in on itself like a dying star and creates another economic black hole, or as it's called in the Spelling household, Tori.

In stock news today, the market eagerly awaits INTC's earnings tonight like Brian Dunkleman awaits another hit show and like Money McBags awaits Hayley Atwell's first nude scene (And Hayley, if you're reading this, and I know you are, could we at lest get a nip slip or a thong wearing upskirt?).  Investors hope for a strong Q from INTC in order to keep the market momentum going.  Also, CROX is up 12% as they are said to be doubling their sales force and stores in India.  Crocs' representatives maintain Indian tastes are rapidly changing and are now only seven fads behind the US.  They believe Crocs shoes are the perfect compliment to 30 year old Members Only jackets and will comfortably snuggle the feet of hardworking Indians as they watch reruns of Hawaii Five-O and wonder who shot JR.

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