The Great Tech Revival Greatly Exaggerated
The truth? It's a range-bound market.
Greetings from New York where, if you're new to this stuff and think the market looks like a bunch of semi-random moves based on the mood of the day, you're exactly right.
Mr. Practical already debunked the great chip revival for those with an interest. For that matter, Dell (DELL) -- which actually sells the chips Intel (INTC) makes, among other things -- did a once-removed debunking of the great chip revival it own darn self. Both companies predicted tighter gross margins and somewhat tepid demand.
The main difference? It's a range-bound market. At the top of the range, Goldman Sachs' (GS) report provokes outrage at a fixed system favoring the rich. At the bottom, damn the Intel details, buy the headlines. And add a little Bank of America (BAC), for no good reason at all.
Consumer discretionary in general is ripping today with the retailer and casino names both screaming higher -- and making me look bad on both. The news: There's bad news in the retailers, and Macau is going to start allowing more visitors at capped prices to the island. Ours is not to question, Minyans; ours is to note the action and trade it how we can.
Here's what else I'm watching as the air and the markets heat up on a summer day:
- Yum Brands (YUM) also plays in China and relies on the ancient nation for growth. Sorry -- no tech or bank kicker and you don't play in today's rally.
- Quietly on the comeback trail this year: J Crew's (JCG) Mickey Drexler. The company's basics have left the woodshed in 2009, up 121%. Make of it what you will.
- FOMC says they're worried about inflation. I'm worried people are going to start whispering about me wasting away, and that my 4.3 40-yard speed will ignite EPD rumors.
- "Employment is a lagging indicator"; try using that in lieu of money the next time you buy groceries.
- When you're hanging in more cash than usual, as I've shared repeatedly, days such as today are frustrating just as the prior week has been relaxing. Put 'em all together and what do you get?
- Balance, Minyans. You get balance.
- Speaking of which: Our final note of the day comes from the Woo Woo Kid, who reminds us that Newsweek has spent 35 years fretting about global cooling in terms which, in retrospect, sound just as naïve as our hand-wringing will a generation from today. My personal favorite? The notion of melting the global ice caps on purpose by covering them with soot. Dang, now here we are with all this extra soot and we don't want it anymore.
- The lesson is: Don't jump to half-arsed conclusions based on assumptions and sham science. But forget that. Just key my Hummer.
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