Individual Stocks Do Matter

 | Jun 13, 2013 | 3:11 PM EDT  | Comments
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Stock quotes in this article:

ba

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ulta

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jnpr

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cien

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hpq

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pvh

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bbby

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rost

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tjx

You mean rates can go lower, too? On a day when retail sales are stronger than expected? On a day when unemployment claims are lower than expected?

What's that all about? A few things, I think.

First, we got oversold. The declines in some of these interest alternatives -- the faux fixed-income plays like the REITs, utilities and MLPs -- got overplayed, at least for the moment. The average REIT was down 13% going into today. They are still not cheap on a yield basis. In fact, I could argue that after today's run, you should trim them. But they were reflecting a non-stop run to 4% on the 10-year note and 2% on the five-year note and I think that's going to happen, at least not in a straight line.

Second, who is to say that the central banks can't be a little cagey? We all act as if they are road-kill, run over by the U.S. bond market. Maybe they have something up their sleeves because today is a day that bond prices should have been hammered, causing yields to jump. Yes, that's how strong the data is.

Third, bonds, like stocks, do get oversold. Bonds have become the definition of oversold, with their relentless fall. It could be a correction of a correction.

Either way, don't forget that individual stocks do matter. We've had terrific earnings news of late and that's been ignored. We got that incredibly bold forecast from Boeing (BA) about multi-year earnings revisions. We got terrific numbers from uber-growth stock fave, Ulta Salon (ULTA). Yes, ULTA does matter because it is heavily shorted. We got a positive read on tech from Juniper (JNPR), Ciena (CIEN) and Hewlett-Packard (HPQ). We got very bullish comments from a host of banks at the Morgan Stanley conference. And just last night we got a breathtaking number from PVH (PVH), the huge apparel maker. PVH's is extrapolate-able. It's in every great department store. And PVH CEO Manny Chirico told me last night that May was strong and the last few weeks were terrific. No wonder Bed Bath & Beyond (BBBY), Ross Stores (ROST) and TJX Cos. (TJX) have run.

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