NEW YORK (Real Money) -- Have we lost some of the most powerful themes of 2013 in the last few weeks? With some crosscurrent selloffs occurring even as the S&P 500 marches higher, it's certainly a reasonable question to ask. So let me tick down some winners-turned-losers and opine on their deaths, premature or otherwise.
The first disappearing theme is aerospace. Ever since Boeing's (BA) last quarter, this group has simply given up the ghost. Any time there is an uplift of any kind, sellers materialize and throw the group back down.
How did this happen? It's because, somehow, out of nowhere, a perception has developed that there is an inventory glut. This perception lurked in the Boeing earnings call, but I thought it was refuted. It came up in the Alcoa (AA) call, and with Alcoa producing 2 million fasteners per plane, there's a real interest here. The company did admit there was some sort of inventory glitch, but it also said this would be resolved quickly -- and I think it has been.
Frankly, it is inconceivable to me that there is anything more than a short-term, anomalous blip here. That's because, first, the airlines are flush and, second, oil is still priced high -- which means the airlines still need fuel-efficient planes. I think Boeing's stock is resting and that the group will take off after the company reports.Second theme: software-as-a-service cloud plays. I think this theme is a tremendous one, because companies that can allow managers to keep track of everything in their business on their handheld is clearly the way of the future. There is no doubt about that. But this theme doesn't do well in a moment when, say, a company such as Hewlett-Packard (HPQ), which has fired tens of thousands of people, suddenly catches a revenue uptick that flows right to the bottom line. An earnings-and-revenue surprise of greater magnitude than expected is always going to be worth more than just a revenue surprise that isn't all that surprising to those who follow the group. That's especially so when there are now so many companies in that group. It's one thing when you have a handful of companies with tremendous revenue growth vying for attention. It's another when you have maybe 25, which is about how many software-as-a-service companies are now out there because of this gigantic wave of initial public offerings. There are too many companies, and not enough dollars to chase them.
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