It's not just a reopening. It's a reopening with a country flush with cash.
I am beginning to realize that many money managers have either never gone shopping, or never gone anywhere at all.
If they did they would know that at this juncture you just cannot stop an American consumer who has a clean balance sheet and a hankering for something to do outside their home.
One thing we know about Wall Street, it is filled with rich people who are often totally out of touch with regular people. We have been getting a series of tremendous numbers from the consumer and they are befuddling the average money manager. That's because they simply don't know how the average consumer really thinks or works.
To these money managers, a trip to Walmart is simply out of the question. It would expose them to all sorts of people who they otherwise would not be exposed to. Wow, what a polite way to do it. But had they been so, they would have seen that there is a level of spending on groceries, apparel, leisure items, often after they received one of millions of vaccines. They did well in hardlines, they did well in seasonal. It's the place that people like to go when they have some money and don't want to break the bank. I wish money managers weren't such snobs; they would know a lot more about the patterns of behavior that can make you money.
Plus, unlike most retailers I have listened to, there was no belly-aching about supply chain or costs that they can't pass on. We saw that Walmart has tremendous scale and scale matters.
Now, I know that Home Depot's (HD) stock went down because, while it had amazing same store sales numbers there were too many analysts who didn't like the cadence, the way the quarter went and they let slip that May was a little weaker than the previous months. It didn't matter that it was up 30% and not 40%, with 30% being unheard of until now, but it is not enough. Plus, its numbers were considered inflated by the escalation of the price of lumber, which has since begun come down, falling again for a seventh straight day.
I get it, today we got housing start number that was weaker than expected, tumbling 9.5%, ruining the narrative. Plus, paint was weaker. It's possible that the spend on the house is now weaker than the spend away from the house, but I certainly won't let these numbers put rain on the consumer parade.
Finally, we got numbers from Macy's (M) and the compares were good, but the real focus for me was the best performing segment: luggage. Americans are going places. They are also buying jewelry and watches and fragrance.
Now you can focus on the stocks of the stores themselves, and that makes me suggest that Walmart down 10 from its highs is a gift. I think that analysts, again who are not drawn to Walmart, perhaps didn't realize how important vaccines were and how they lured shoppers. I also don't think that snobby analysts realized that Walmart's a pretty nice place to shop. Two weeks ago I went in my Walmart for a fishing pole and I came back with jackets, hats and boots that were so good and so inexpensive that I couldn't believe my eyes or my wallet. It was like going to a foreign country with an incredibly weakened currency and just walking aisle to aisle until your cart's filled. Not only that, but for weeks on end I had heard that Walmart's e-commerce division was doing poorly and it turned out to be a total joke, as bad as the supply chain reportage we hear about Apple (AAPL) that's often very wrong. Walmart proved today there's room for both the Bentonville colossus and Amazon (AMZN) .
Second, have luggage will travel. I've got three ideas for this one: first Norwegian Cruise Line Holdings (NCLH) , which finally got a check-off from the Centers for Disease Control and Prevention on cruising. The pent-up demand here is incredible and the stock is still way down even as it has had to take on a ton of debt. Two, Vegas is such a natural place to go because it's big, it has a full array of price points and it's got NFL football. Third, I like Disney (DIS) now that it has been de-risked by the alleged shortfall from Disney+. Look, Disney+ is important, but I think we need to start thinking about movies, about cruise ships and, of course, theme parks.
On the movies, you may think that AMC's (AMC) stock is up huge totally because it is a meme stock that is being manipulated upward by the Wall Street Bets people. I think that it's up because people are going back to the theaters and this is the last man standing.
Third, fragrance: Ulta reports next week. I think Ulta's (ULTA) good but Estee Lauder (EL) is fantastic. We just bought some more for my charitable trust, which you can follow along by joining the Action Alerts PLUS member club. Again, like Wynn (WYNN) , Norwegian Cruise and, Disney it is down and that's when you have your best chance to buy.
Finally I want to highlight Airbnb (ABNB) which told a great story on its call for all but international but then unleashed about 155 million shares, a huge amount and it just crushed the stock. You have to buy some now while the offering is still settling. The smart institutions, with analysts who might actually use Airbnb vs., say go on the Haven part of the Norwegian Cruise line or stay at Wynn or take a Disney cruise, know to buy this one when it's down and out.
Now, I know today was a hard day to read. We had many WoodStocks, the stocks that are loved by Cathie Wood, the redoubtable money manager who likes like to buy classically overvalued stocks and hope they come out OK. That usually means the buying of Palantir (PLTR) , Twilio (TWLO) , Zoom (ZM) and Unity (U) and a bunch of other incredibly expensive stocks. There was also a run on all sorts of cybersecurity companies that, again are highly valued, stocks that are usually coordinated with a decline in key commodities like lumber and oil. The market certainly works in strange ways. Oh, and of course, AT&T was down again as executives and board members of the company are accusing the widows and orphans and grandmothers who own the stock of being short term, of being traders, as the gall continues and people who hurt their shareholders continue to rake in millions. They better avoid Walmart, or they will see people who were in their stock for what was supposed to be a safe dividend. Do you think the AT&T execs are snickering over their silly shareholders between sips of Dom Perignon and Wellfleet oysters? Nah, that's wrong, I think it's Cristal and Malpeques.
But the big story today is a simple acknowledgment that Wall Street analysts are totally out of touch with what the tens of millions of Americans are doing with their stimulus checks and their benefits and the windfall they have from not doing anything in the last 15 months, except work out of their home while fixing it up at the same time. The baton is being passed from the work-at-home and stay-at-home stories to the travel and leisure narrative and it's not too late to invest in the transition, especially given how clueless Wall Street's overpaid analysts wouldn't recognize this move unless they were hit by a rapidly declining in price two-by-four right into the kisser.