The Daily Dose: Digging Out the Facts

 | Jan 07, 2014 | 1:00 PM EST
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I have next to no thoughts on the market this fine day. You might ask how that is humanly possible. The answer: because my firm's proprietary research on the beleaguered Sears Holding Corp. (SHLD) has created another national frenzy, the second in the past two months.

Words can't express how extremely rare this development is, but it is rewarding having dug so deep into a company to bring the facts to light. So what precisely does this whirlwind of activity on a dying Sears mean? Here is a quick snapshot into the aftershocks of something that goes viral on the Internet.

  1. Our website crashes, again.
  2. Our LinkedIn friend requests surge.
  3. We have to monitor all social accounts for disturbing posts.
  4. I have moved staff from other projects to answering e-mails, ranging from interesting new business proposals to accounts of people hurt by Sears.

The only market I am generally interested in now is the one for Sears. The bottom fell out of the stock Monday following the public release of our research. Yes, I continue to rate the stock a Sell going on five years.

I did garner two landmark tweets from Sears executives, which is encouraging. You never see this type of response by a public company's Twitter (TWTR) feed, and that reinforces my opinion that Sears lacks proper internal processes due to high turnover in the executive ranks.

I must confess that I lied: I have been watching the market and its related news from afar, and I have a couple of thoughts:

  1. Respect earnings warning from furniture maker Select Comfort (SCSS) and the stock's reaction (keep Samsung's miss in mind, too). Remember, the company was exposed to the same operating environment as other retailers set to pre-announce results shortly.
  2. Following a miss in a PMI report led by a plunge in new orders, we are a few more macro releases away from this logic materializing on the Street that's negative to stocks: The economic recovery is not self-sustaining; tapering is tightening.
  3. Asian shares are at a three-week low, responding to new negative data. It's hard to cover up the truth when Fed liquidity is being pulled back.
  4. If it isn't already, unemployment expectations are becoming a serious risk to first-quarter growth estimates for many companies.

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