Good enough. That's the theme today.
Exhibit A: Texas Instruments (TXN) , United Technologies (UTX) and Dupont (DD) . All three delivered 2% growth. This market lapped it up, because in a world of slow growth to no growth, that's pretty darned good.
UTX CEO Greg Hayes pretty much said it himself when we were talking this morning on Squawk on The Street about why his stock reacted positively to that kind of growth: Why not? It's better than 3M (MMM) , better than Honeywell (HON) and better than General Electric (GE) . GE is part of the Action Alerts PLUS and Dividend Stock Advisor portfolios.
How did United Technologies do it? Execution and innovation. On the execution front, UTX closed a Carrier plant in Indiana and moved the work to Mexico. Of course, some would argue against such a move -- and it is something that Republican presidential candidate Donald Trump has pointed out endlessly as one of the problems with Free Trade. I thought Hayes acquitted himself well in defense of the move. That said, it is necessary if you are going to have the outstanding cash flow that UTX demonstrated -- cash flow strong enough that you can raise numbers in this environment.
As for innovation, we don't often talk about innovation in aerospace anymore, but United Tech has an engine called the Geared Turbofan that is taking the industry by storm because it saves 15% on jet fuel -- the principal cost for airlines.
I go into this because without innovation, and without cost cutting, you can't get the kind of profitable growth that this market demands to send your stock higher.
Same goes for Texas Instruments. We used to expect huge growth from this company, but now the market's gaga with 2% growth. Why? Because it's making its growth within the internet of things -- and not the cellphone.
The cellphone is so moribund that even Verizon (VZ) seems to want to distance itself, praising its Yahoo (YHOO) acquisition as the key to its mobile media strategy, because its growth fell short of expectations. Don't' worry about Verizon, it's got a terrific yield that, of course, gets bigger as the stock goes down.
It's the automobile space that has Texas Instrument's stock flying. It's not necessarily the sheer numbers of autos being built, it's all the gizmos in a car -- gizmos often powered either by Texas Instruments or putative takeover candidate NXP Semiconductor (NXPI) , which reports tomorrow. NXPI is part of the Action Alerts PLUS portfolio.
Texas Instruments builds the chips that these car companies want. Remember ABC: "Anything but cellphone" is the watch phrase. It doesn't hurt that consolidation talk is rife in semiconductors -- witness the spurt in NXPI, as well as AMD (AMD) and Micron Technology (MU) . The latter saw buzz because it just put in a poison pill, which that attracted a lot of speculation as to why.
We know, after Softbank's (TYO) huge bid for semiconductor maker Arm Holdings, that there could be more deals lurking. What's Qualcomm (QCOM) going to do with its gigantic cash position? Why does Nvidia (NVDA) , with its high-performance graphics chips, keep going higher? You get the picture. QCOM is part of the Dividend Stock Advisor portfolio.
What about Dupont. Why is the Street loving Dupont's 2% growth? Simple. Because the chatter is that the company would have had no growth at all if it were still run by Ellen Kullman -- instead of Ed Breen, late of Tyco International (TYC) , who replaced her.
Dupont has amazing growth from divisions that people had figured wasn't possible -- especially agriculture. Its seed business grew by 3%. How? Same at United Tech and Texas Instruments. It has better seeds. That's leading to market share take. I keep salivating over what will happen after Dow Chemical (DOW) and Dupont merge to form, among other things, the world's largest seed company.
But it is the rest of the businesses, the industrial businesses, that were all better than expected. Plus it posted a monster cost reduction. Costs are down 12% since the year began. I guess there really was all the fat that engaged shareholder Nelson Peltz said there was, during his failed proxy fight to join the board. DOW is part of the Action Alerts PLUS portfolio.
In some cases, you can even miss numbers and still be rewarded, provided you give a good outlook. Las Vegas Sands (LVS) failed to beat numbers, but no one cared, because CEO Sheldon Adelson said, of his gigantic Asian operation: "The challenging environment in Macau remained challenged in the quarter." So far, not so hot. But he added: "But we do see signs of stabilization, particularly in the mass market. Our mass-gaming revenues in the month of June 2016 increased versus the same month in 2015 -- the first year-on-year monthly gaming growth we have experienced in two years."
A hint of growth is good enough. And not only has LVS rallied, but the call ignited the group -- including Wynn Resorts (WYNN) , the other Macau power, which is putting up a gleaming new enterprise. No wonder. Wynn, who had bought 285,000 LVS shares in August of last year in the $50s and then another $31 million worth in the $50s and $60s in January and February, could stand to benefit, too. Wynn reports tomorrow.
In fact, it looks like insider buying is also a theme, right now. An insider at the founding backer of Netflix (NFLX) bought 600,000 shares at between $85 to $87 -- igniting that stock. Why not? The buyer was none other than the lead director, Jay Hoag, a venture capitalist from TCV, an outfit I know well. That kind of buy's a statement, nothing idle.
How ironic is this: McDonald's (MCD) didn't hit the 2% benchmark and its stock is getting slaughtered. That's right, its 1.8% comparable-store gain is light versus 3% expectations. But to be fair, the stock ran up on the possibility of big numbers out of Japan -- because of a Pokemon Go tie-up, naturally.
Alas, those numbers didn't materialize this quarter. And critics are saying that CEO Steve Easterbrook has to do more than just offer all-day breakfast. I say give it a rest, and give him a break. The whole restaurant business got hit with two big downgrades today, even as the money's now flowing into retail -- as we hear about good sales from Gap (GPS) and Nordstorm (JWN) . They are as oversold as the restaurants were overbought.
Of course, heaven forbid if you make a huge amount of money, as in Gilead Sciences' (GILD) case, where it will more than quadruple its revenue from just six years ago. But it forecast that its huge Hepatitis C franchise might be peaking, because it has cured so many people -- it's not a maintenance drug, where the patient is hooked for life, it is an actual cure -- so it's regarded as all downhill from here.
One thing is for sure, there are more companies right now that are reporting in line -- and therefore disappointing -- numbers, and that's not good enough. Hence the whole market's decline. Oh and it doesn't help that there's a Fed meeting going on, where we will hear tomorrow whether good enough for some is too good for all, and a tightening is necessary. Let's just say, though, right now, it's a rare triumph in a very tough environment.