The Daily Dose: Don't Be Clueless

 | Jun 03, 2014 | 9:00 AM EDT  | Comments
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Stock quotes in this article:

aapl

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adp

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payx

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ctas

Smell that in the air? It's the thick fog of disappointment emanating from Apple's (AAPL) Worldwide Developers Conference. Yes, I know, Apple released all sorts of new wizardry that wasn't known by non-institutional investors just this past weekend. It's a ton of wonderful product newness that years from now we will all realize changed our lives in one form or another.

Personally, I am obsessed with iBeacon and intrigued by how large retailers are starting to ingrate it to stalk people in stores and monitor their every habit. Nevertheless, Apple devotees, from developers to stock fan boys, will usually leave this event disappointed no matter what information the company shares. Even if the iBand was hinted, someone, somewhere in a prominent industry position would be complaining. Personally, I left very enthused by Apple's announcements; I think it sets up well for seriously transformative products (finally) within the next year. You may want to put the stock on your radar screen if it continues to act weak.

So I am here to return your mind to normal, a day after ingesting too much Apple WWDC live-blogging. In amassing a ton of interviews that will take the newsfeeds by storm shortly, I wanted to share snippets of what is being learned. There are endless things happening in business unrelated to Apple, though admittedly a good portion of the conversations I am having revolve around leveraging Apple technology (could be through an iPhone app or for business tasks via the cloud).

The time to begin preparing for second-quarter earnings season (begins late July) and for the end of 2014 is now (since stocks move six months in advance of news, or at least they used to).

Stock Market Volume Is MIA

I always find it interesting that high-level managers rarely mention the stock price in discussions. They may be thinking about it given their compensation plan structure, but rarely express satisfaction or dissatisfaction with it, an element I like. Executives have a clear focus on execution, whether it's finding new areas to improve processes or devising a plan to milk more sales from a large customer.

However, maybe corporate executives need to begin paying attention to the stock market at this precise point. Memo to the masses: You don't want to see this lack of participation as the market continues to move higher.

  • When the S&P 500 hit an all-time high on May 23, roughly 20 of its 500 component companies reached 52-week highs.

Jobs Stocks Suddenly Stuck in the Mud

I'm not too sure about the read on the jobs stocks that I track to help gauge future employment trends. Earlier in the year, names such as ADP (ADP), Paychex (PAYX), and Cintas (CTAS) were moving nicely higher, in hindsight foreshadowing the jolt in employment we have experienced lately. Going into the May employment report and looking into the back half of 2014, these stocks suggest that acceleration above 300,000 on headline employment may be a figment of the broader market's imagination.

The real challenge is:

  • Am I reading too deeply into the lack of action in these jobs stocks?
  • If not, is there an event about to surprise us that could knock employment from its recent pace?
  • Should there be a development, which sector or sectors will it attack first?

Corporate Restructurings Continue

I am personally obsessed with this theme as countless executives I chat with are doing ingenious things to reduce costs and operating expenses. Trust me, cost cuts don't solely involve sending people to the unemployment line. Companies are restructuring product packages, reducing transportation times and filling trucks up more. Vending machines are going onto manufacturing floors to monitor the consumption of assets by employees. It's amazing activity that in my view points to continued pressured wages and hours worked.

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