The Daily Dose: My Post-Jobs Plan

 | Feb 07, 2014 | 9:27 AM EST
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Jobs day's hotly anticipated numbers are in. Guess what? You are reminded again to ignore outside influences and do your own due diligence on companies and macro reports. Listen to me and nobody else. But seriously, bad news is bad news? Good news is good news? Dogs are cats? Give me a break with this useless jargon. The fact is that while businesses are hiring, they are not bringing on new employees at the pace the stock market expected given the array of pressures attacking financial statements. That's why I always make earnings season my guide to help me predict the nonfarm payrolls reports.

As for an actionable post-jobs-report plan, I hate to say it but stay cautious on the markets. Three things support my view:

  1. A significant reduction in retail jobs will spread to other sectors of the economy in coming months, and it is a wakeup call to macro strategists expecting a boom in household consumption. A store closure wave is about to sweep across the U.S., trust me.
  2. December is initially being viewed as confirmation of a soft economic start to 2014 (no material weather revision upward).
  3. We just aren't getting the expansion in hours worked and wages that would facilitate quicker escape velocity. Remember this as the Federal Reserve appears to be on a preset course for taper (though it suggests otherwise).

6 Things I Learned While Studying

Chasing headlines as a stock strategist or as an investor is a losing proposition over the long term. Yes, my Twitter feed is hot with daily activity, but believe me, that interaction doesn't pay the bills. To get ahead financially and professionally, you have to be ahead constantly -- and that only comes from spending blocks of time studying. Depending on my commitments, Thursday and Fridays are my days to study and recharge the creativity batteries. During earnings season, that entails reading countless earnings reports. Here are six things I learned while making the rounds Thursday:

  1. ICYMI (in case you missed it), currency is destroying the top lines of companies, leading to less leverage over expenses. Two decent examples are Kellogg (K) and Costco (COST). Are you paying attention to the impact of currency on financial statements? Probably not.
  2. Currency devaluations in emerging markets are causing companies to raise prices in these markets to the detriment of volumes.
  3. Clorox (CLX) and Procter & Gamble (PG) are losing market share in key categories.
  4. Speaking of Clorox, a 6% price increase on Glad trash bags goes into effect in March. Stock up now!
  5. Retailers won't budge from aggressive promotions in the first quarter, as per comments from consumer-products companies.
  6. If I had to pick a consumer-discretionary stock, it would be Polo Ralph Lauren (RL). I sense that expectations have been reset in front of multiple new growth avenues opening globally.

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