I tried to do something different today. I got up at 3:30 as per usual these days, and instead of looking at the overseas markets for direction, I considered all the different corporate data points from the U.S. and tried to estimate what the market would do today based on them. You know what? We got just what I figured, a positive session, but for all of the wrong reasons.
Yep, what I did was look at the individual retail sales numbers, read up on all the companies that have reported of late, considered U.S. interest rates, copper, the price of oil, and the upgrades and downgrades, all without peering once at the stock futures or China, Japan and Europe. In other words, I looked at everything in a vacuum, and in that cone of domestic silence things were overwhelmingly positive.
But you know why the market went higher? Because nothing negative happened overseas. It looks like the Greece issue could be solved by a can kick, both short and long, with the long being a delicious stretch-out of payments to make them far less onerous while the fundamentals, hopefully, get better. Meanwhile, we got no significant newsflow out of any country in Europe of note. Just a vacation from data.
How about China? Gloriously without a significantly negative data point. No purchasing manager's reports. No construction data. No manufacturing screw-ups. Nothing, except the first increase in the Baltic Freight Index in days, a little blip up that shows there might be a pulse.
We have all come to believe that everything out of China is going to show definitive slowing, so all you can ask for is a day of no data because, alas, when it comes to China, no data is good data. Ukraine, for a couple of hours, seems like the status quo but we are beginning to hear that Germany is no longer in a war footing mode and the possibility of an Eastern Ukraine buffer zone in return for Ukrainian independence without an entrance into NATO may get a peace deal done.
So, we had no negatives overseas. When that happens, you know what we consider? We consider how companies in the U.S. are doing. What are their profits? What are their prospects? What are they doing to augment their own value?
And like so many other days when we actually consider the worth of companies in the U.S., we love what we see and we buy.
Consider Coca-Cola (KO), which is rallying nicely. Why? Simple: Coca-Cola simply isn't doing as poorly as it was. I thought the release should have said something at the top like, "New Coke, we're not as bad as we used to be." But they couldn't do that, I guess because of the connotation of "new coke," one of the great failed brands of all time.
Or how about General Motors (GM)? Today we learned that an activist group of investors wants to put a firebrand on the GM board who is compensated by how much the stock goes up when he gets on the board. The beef? He wants more capital returned to shareholders than the company has already pledged to do. Given that GM just gave you a 20% dividend boost that sent the stock flying, as it now yields more than most stocks out there, I was thinking you can't be too greedy here. But in the new world activists are all greedy and since my charitable trust owns GM shares, I'm thrilled by this newfound brouhaha.
Or how about the shoot the lights out numbers from the likes of Urban Outfitters (URBN) and Aeropostale (ARO)? They've both been struggling for ages, although struggle is a relative term because Urban's been making money, just not enough of it, and Aeropostale's been bleeding from the eyeballs. But now Urban's reversed the downturn at its flagship store and Aeropostale, which was supposed to lose, say, 20 cents a share, is almost going to be breakeven. Teen apparel comeback from the dead. There's a lot to cheer about.
Same with Martin Marietta Materials (MLM), a company that makes crushed stone, sand and gravel for the construction industry, which delivered a gigantic beat this morning and talked about how both volume and price are looking up. It's a bonanza and a sure sign that things are going much stronger in this country than many of the aggregate data would indicate. I guess you could say that aggregates, the technical term for the stones that Martin Marietta purveys, trump aggregate data any day of the week.
Or how about Masco (MAS), which reported a terrific quarter yesterday, bolstered by strong sales of bath equipment, decent sales of kitchen building supplies and fantastic paint sales? When you get that kind of number you get a terrific reverberation through all of the retailers that sell hard goods. Masco also confirms what Martin Marietta is saying: Homebuilding, one of the few areas still hovering around recession levels, might be stirring.
Then we got a real unexpected gem. Yelp (YELP), one of the big internet underperformers last week with a quarter that was widely panned as a precursor to a big slowdown in the business, made an acquisition and preannounced a revised, more positive earnings outlook. Given that Yelp just disappointed no fewer than three days ago, this was a terrific, much needed and, yes, shocking, do-over that really nailed the shorts.
Plus, without the background noise of our pathetic trading partners good research was able to shine through. Starbucks (SBUX) rallies two bucks on a research note from Piper Jaffrey saying that the stock's got much further to run. This, even as it has done nothing but run since that last amazing quarter. When people are distracted by Greece or Ukraine or China, they don't even bother with notes like this. Today they feasted on them.
We've seen a bunch of airlines blow the numbers away of late but nobody has cared because there's been a rally in oil to beat the band going on and that means it's hard for the airlines to top what they've already delivered. However, today oil finally blinked, down almost $3 and that was the perfect backdrop for the thrifty Spirit Airlines (SAVE) to report. Spirit, which is on Mad Money tonight, said pretty much all the same terrific bites that the other guys gave you, except this was done in exceptional oil weather and the stock explodes higher!
And then wonder of wonders, Starwood Hotels (HOT), besieged by shareholders for not spinning off its timeshare unit the way Marriott (MAR) has, announces a stupendous number and then decides to do the spinoff! I had been thinking that Starwood's symbol, HOT, should be changed to COLD, that's how badly the stock's been acting. However, Starwood also told a good tale of earnings, which sent the whole industry higher, an industry with stocks that had been feeling pain from talk that the strong dollar has been hurting tourism.
With that positive backdrop we had kind of an all-is-forgiven moment for many stocks that were damaged by the selloff at the end of last week. Chipotle (CMG), which had been hobbled by worries about future same-store sales, snapped back at last as the sellers were exhausted. Same with Gilead Sciences (GILD), which carried the whole group higher. Finally, Apple (AAPL), perhaps in response to the multiple uptakes of Apple Pay, including a very positive piece today in the papers about JetBlue Airways (JBLU) taking I-pay on its planes, went to an all-time high, further verifying that you should own, not trade, the greatest wealth creator of the era.
Put it all together and you can see that when America was an island, with an economy detached from the rest of the world, without the strings of hedge funds pulling it every which way including loose, it could react to individual company news in a rational and coherent way. And that's why today was, alas, a rational and coherent day.