Well, what the heck are they supposed to say?
I keep thinking about that statement when I try to parse all of the reports we have seen and heard this quarter.
This moment is one of the toughest I have seen in corporate America. For all of the quarter we just had the virus news was better and better. You could taste the comeback, the Re-opening. It was palpable, it was upbeat. You simply couldn't expect it to be this fast no matter what you dreamed of. Finally things were coming together.
Then despite the continued rise in the market, the next wave of the virus hit, the irrational phase, where people found reasons not to get vaccinated and all the plans and dreams were thrown out the window. The government, including the trilogy of the FDA, the National Institutes of Health and the Center for Disease Control became a partner of those who didn't want to get vaccinated by making the shot optional. How else can you describe an FDA that would grant Biogen (BIIB) the right to market an anti-Alzheimer's drug with seemingly no efficacy, but not give use of a vaccine that's worked around the globe a billion times, a designation other than an emergency one.
That has brought to the fore what most executives most feared: irrational optionality. That's right, other than the NFL, which has put the onus on the players to lose a game and forfeit a paycheck, nobody's doing anything remotely compulsory.
At the same time the Chinese Communist Party dropped all attempts to appear capitalists, clamping down on class divisions-the private tutoring - wealthy people - the billionaire class that is out of step with the new, Maoist philosophies, and the United States which seems now clueless to the change and clinging to the Chinese stock market.
At the same time the chip shortages appears unabated. Who would have thought that wouldn't have eased a smidge.
With that July switcheroo you have to believe that some executives wanted to get more cautious.
How have they handled it?
Some just decided to extend anything that's weak to the quarterly outlook. That means UPS (UPS) decides that its strength correlated with the earlier waves of illness and those are done, so now the future goes back to 2019 or worse.
Others like Apple (AAPL) have to tell a story of chip caution.
Starbucks (SBUX) has the unfortunate distinction of having a glitch in China.
Then there are the stories that simply are totally out of synch with, say, the new mask mandate. That would be Mastercard (MA) , seemingly oblivious to what we are now wearing again.
Or Google (GOOGL) which talked about strong travel and vacation ads when doors are closing.
Finally there are the companies that haven't seen any glitch at all and are likely not to do so. That's AMD (AMD) with broken field running because the defense - Intel (INTC) - has broken even as it looked jacked coming in.
I marvel at how hard it is because nobody knows really what the future may be. Even AMD has to worry about the approval of its Xilinx (XLNX) deal although, fortunately, because of Intel's bumbling, and Nvidia's (NVDA) highest end chips, it's got room to run.
What's really a shame is that if a company takes the most logical course, giving no outlook, that's the worst: think UPS. Yet that's the most honest. No medals for not forecasting, though.
So the second quarter report goes kerflooey is unpredictability - the Chinese re-instating Maoist policies and half of our country non-believers who either don't mind getting the Delta variant or have had it already - and executives still must try to forecast anyway.
It's pretty ridiculous and yet it's the only way that salves the jackals of Wall Street who know that, like Wiley Coyote, the stock market's rise might have ended after the cliff, not before it.
(UPS, AAPL, GOOGL, AMD, and NVDA are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)
