- why you should buy the recent dip, not sell it;
- why Research In Motion might now be a decent investment; and
- which stocks could rally on Chinese stimulus.
Add Earnings to Accommodation Posted at 2:56 p.m. EDT on Friday, Sept. 28 The purists hate this kind of market because it is all about the possibility that the central banks can reverse the course of business events. It is without a doubt that if the Federal Reserve weren't accommodative we would be appreciably lower. So the purists, not seeing any results so far from the Fed, naturally believe we must be headed appreciably lower. It's just a matter of time. The problem with that analysis is that during the time we have gone up gigantically. And if you can just dodge the companies that say something bad, you have been able to make a lot of money until this recent pullback. I think it's just too hard for most people to relate what seems to be futile activities by central banks to positive stock prices. But put it this way: We have yet to see a gigantic estimate cut for any company save coal. Now, you might think that in two weeks the parade of horrendous earnings is going to begin. I come back and say that this reset we have just gotten is going to cushion some of the disappointment and what isn't cushioned by this decline will be cushioned by more accommodation. > > Bull or Bear? Vote in Our Poll I know that seems like a win-win, but that's not what I am saying. I am simply pointing out that we haven't seen a dramatic plethora of preannouncenments because things aren't horrendous. Sure, we point out Norfolk Southern ( NSC), Bed, Bath & Beyond ( BBBY) and FedEx ( FDX). But we have had a huge number of companies report in the last month, and for the most part the earnings are really pretty good. So, to me, if you have fairly good earnings and you couple that with accommodation by central banks globally, that adds up to a reason to buy the dip, not sell it. There's simply not enough bad out there, and what's really bad can be offset by the stimulus, which is why I think we held up under the hideous onslaught earlier in the day.
A Tale of Two Smartphones Posted at 11:45 a.m. EDT on Friday, Sept. 28 Two phones I don't want. Two phones that had better sell well or else their stocks won't be able to rally. That's how I feel today about both the Apple ( AAPL) iPhone 5 and BlackBerry 10 from Research In Motion ( RIMM). Apple came clean this morning with CEO Tim Cook offering an apology for an Apple Maps application that has been universally panned. While Cook said that the feature will get better as Apple gets more data, I am not holding my breath, and you have to count me out as a buyer. I am thrilled with my iPhone 4S, and there's no way I am going to trade up to an iPhone 5 if the Maps app is a trade down. I use the Google ( GOOG) Maps application pretty much every time I am on the road or in a strange surrounding. I have always felt OK with directions -- not great, not bad. But my 4S has made my navigation best in class. I have no desire to return to a world where I simply don't know where I am walking or driving. Plus, there's no way to bridge it: You can't put Google Maps in if you want to, which is horrendous as it makes me feel that Apple's morphed into Microsoft ( MSFT) in the days when it jammed you with an inferior browser because it simply could. What a terrible about-face from a terrific company that has always been willing to integrate the other guy's stuff if it was better than what they had made themselves. As far as the BlackBerry 10, it sounds like a dynamite device, and I like the RIMM keyboard style very much, much more than the Apple's touchscreen. But, after listening to Becky Quick grill CEO Thorsten Heins this morning, I am not sure when the darned thing is going to come out. His refusal to commit to a date, other than some vague first-quarter assertion makes me think that we could go six months before we see the device. Who can wait for that?
What China's Stimulus Means for U.S. Markets Posted at 1:44 p.m. EDT on Thursday, Sept. 27 We keep hearing that stocks have advanced and seeing the headline "Stocks Advance Because of the Hope for Chinese Stimulus." This headline is a recurring excuse for any advance, particularly a commodity-led one, so perhaps it is worth parsing where we are with Chinese stimulus and what it means for our markets. First, we always get excited about Chinese stimulus when we see the Chinese stock market rally like it did last night, with a better than 2.5% gain for the most closely followed Chinese stock index. That makes sense when you consider that the European stock indices all turned ahead of when the rich countries agreed, preliminarily at least, to help the poor ones.