- a powerful combination of bullish market factors,
- the real bargains created by a pair of tech IPOs,
- and what China is doing to the iron and coal markets.
Confluence of Bullishness
Posted at 11:36 a.m. EDT, March 25, 2010 We've got a powerful combination of lower unemployment claims, higher retail sales from Best Buy ( BBY) and a Fed chairman who is still saying he will not pull the rug out from this economy. In the meantime the bond market, while not tamed, is certainly not enough in the way to matter. It is still not competitive to stocks, and the banks have Bernanke on their team while financial reform seems toothless at best and certainly not negative to earnings. After my worries about a more prohibitive and costly health care bill weren't realized, I'll be darned if I am going to start being worried about a pro-industry financial bill. So, let's see, retail going well, Washington not being punitive -- meaning that Bernanke's greenlighting us -- and the financial reform being well received from the market ... that's a recipe for much higher prices. Stock prices. Not bond prices, which took still one more hit on Bernanke's dovish talk. It's funny, I wanted so much to draw the conclusion yesterday when General Mills ( GIS) was down that we might be about to witness a rotation out of the soft-goods stocks. Certainly seemed possible given that General Mills beat estimates and then raised its future earnings predictions. Then the stock got hammered. I figured, here it comes, a "sell the softs, buy the hards" moment! Sure enough, in this endlessly bullish run, what happens? Pepsi ( PEP) and Coke ( KO) have two of their best days in a while and Procter & Gamble ( PG) moves up, too! Those are quintessential selloff names in any rotation. More meaningfully, GIS is down again, and yet it has no pin action whatsoever. Let's throw this in: Could there be more pin action off of Best Buy? Try Hewlett-Packard ( HPQ), Apple ( AAPL) and even IBM ( IBM). I had thought that BBY would say after the last quarter that things looked better. Now they are saying it loud and clear. Better late than never. Maybe they are just reacting to better employment reports, like the claims we got today.