We went out last night trying to figure out which track to be in and which horses to bet on. The early portion of yesterday's trading was a victory for the industrials. But the latter part went to the consumer products players, which managed to put on a pretty stellar show. That shift was probably a reflection of the enormity of Emerson's (EMR) miss more than of anything good done at General Mills (GIS) or Clorox (CLX) or Dr Pepper Snapple (DPS), although the latter two made you want to buy them after you listened to their CEOs on "Mad Money."
Banks, of course, did well the whole day and gained steam. Techs started out hot and came out cold. Oils? Not bad, Take a look at Exxon (XOM), which, after its miserable quarter, is now nicely above where it was when it reported. Doesn't hurt that EOG (EOG) blew the doors off the operation.
But what we needed was something that reignited the growth-stock group. In a true bull market like we are in, one that has been confirmed by a 20% climb from the bottom in November, you need to keep all the balls in the air. The discussion is never about which stocks got hammered the worst. Or which sectors slipped and slopped in zero-sum fashion vs, the winners. That was the way we saw this market at the beginning of the bull. If drugs were up, cyclicals were down. Banks gave it up and foods took it.
That's not the case anymore. Now it is just sector move, sector rest.
Which brings me to last night's business, the shockingly fabulous number that Whole Foods delivered on top of the excellent number that Disney put on, although the latter will have nitpickers because of problems in plain-old broadcasting that will only come as a surprise to the troglodytes who don't care to know the available facts ahead of time.
Whole Foods was amazing. Do you know what it is like to repeal a whole new and awful misperception that the bloom is off the rose? That's what Whole Foods had to do. They had to prove that the business wasn't decelerating or that they weren't getting their butts kicked by Kroger (KR) and Trader Joe's, which had become the perception after last quarter's disappointment. They had to explain all over again why there really is room for a tripling of the store count. They had to discuss whether the desire for organic food hasn't cooled, a perception that Hain (HAIN) is fighting with right now.
They did it all. They made you feel that you could have five times the number of stores they have. All different formats and places, too. They even made you realize they haven't even tapped into low-hanging fruit like affinity programs that are working so well at like-minded places like Starbucks (SBUX).
Excellent quarter. Fabulous comeback. And I loved the split because, heck, it is entertainment and the retail investors need something to keep them in to buy 25 shares.
Disney? Monster University good. You could hear the air go out of the room when CEO Bob Iger talked about the weakness at broadcast. Bob's like that. He doesn't shy away from the bad, although he did, thankfully, not put it up top. You didn't know the ABC weakness until you knew the movie, theme park and ESPN strength. Fine with me. Most people still haven't grasped what Iger's done here. He has given you a multi-year smoothness to earnings by putting money behind tent-pole movie releases that assure you that the quarter will be made. This is a man who tacks aggressively. We basically heard, no more "John Carters." We are going with the proven. No need to do more than that. Remember, he's got Pixar, Marvel and now Lucasfilms to pick from. Why the heck does he have to invent new superheroes?
I figured that the people of small minds would say that broadcast is no good so you should sell. There's always something that's no good. May I remind the sellers that last time it was movies?
The time before that it was ESPN?
These are like flats on a car with spare tires galore. And Iger changes them on the fly, as this is Nascar not the Jersey Turnpike.
Pit stops will be made. Broadcast will be fixed.
But more important than that granularity is a recognition that the growth stocks have a reason to rally today. They've been stalled for about 72 hours.
Time to shine.