- three stocks that suggest the current market is a forgiving one;
- why claims that the jobs report is politically rigged are outrageous; and
- why Hewlett-Packard CEO Meg Whitman's recent CNBC interview was so bad.
Three Confusing New Highs Posted at 3:06 p.m. EDT on Friday, Oct. 5 Three names on this new-high list intrigue and confuse me today: 3M ( MMM), Wal-Mart ( WMT) and Monsanto ( MON). They confuse and intrigue me because the last time they spoke, they disappointed. 3M issued guidance recently that said because of weak global growth, its previous plan had become a stretch plan. Not only that but analysts cut numbers. Yet the stock is up 16% this year. Wal-Mart missed its estimates by a great deal and got hit immediately. Ever since then, though, it's been roaring back higher. > > Bull or Bear? Vote in Our Poll Monsanto? Earlier this week, the darned thing was clubbed big time in a widely acknowledged miss of the estimates. In fact, it was regarded as the biggest disappointment of the week. Usually, stocks are in the penalty box when they miss numbers. They tend not to go higher until we see convincing evidence of improvement. But 3M, Wal-Mart and Monsanto have had no good news in the interim. When you get three high-profile stocks like this to run after bad news, it says more about this market in general than these stocks specifically. It says that you have to open your mind to price breaks. It says that companies such as Nike ( NKE), Coach ( COH), Norfolk Southern ( NSC), Bed Bath & Beyond ( BBBY) and FedEx ( FDX) have to be re-examined, if only because the opportunities we got from 3M, Wal-Mart and Monsanto can't be isolated. What could be the bull case for each? We think Bed Bath & Beyond, which we have been buying for Action Alerts PLUS, can be bought because some of the reasons why it missed have to do with short-term concerns involving an acquisition. Coach happened because the CEO took his eye off the American market, and I bet that won't happen again. Nike's already bouncing back -- I think because people are betting that China's weakness could be one-off. FedEx? Big analyst meeting coming up next week with expectations extremely low. Finally, there is Norfolk Southern, a coal play that could improve if natural gas keeps climbing.
Just Chill Out About the Jobs Number Posted at 3:06 p.m. EDT on Friday, Oct. 5 Not everything is political. This morning we got a Labor Department report that was essentially in line, an addition of 114,000 jobs, neither here nor there. The jobless rate fell from 8.1% to 7.8%, and hourly earnings were more than expected. We had some nice revisions upward from previous months, showing in particular that the anemic report from August understated job creation. I am putting all of this data in flat, dry terms, because it is flat and dry. There's not much to it. It's good to see that the jobless rate is below 8%, the lowest it's been since the beginning of 2009, but far worse than it was a half dozen years ago, and it is neither encouraging or discouraging, especially when you have to worry about the upcoming fiscal cliff. Now, here's what's got me steamed. Because I gave that summary on air at CNBC, literally just said it like that, I was instantly a target of the anti-Obama crowd. Because I didn't question how the employment rate got to below 8%, because I didn't suggest that the number might have been rigged to look good for President Obama, I was pilloried as a houseman, owned by the Democrats, all over the place. This is outrageous. My philosophy on this Labor Department report has been crystal clear since I first began opining on it in the 1980s -- you can't look through it. You can't question its authenticity. You can't say it is political, and more important, you can't question its legitimacy for one party without questioning it for another.
Meg Whitman, You're No Steve Jobs Posted at 1:17 p.m. EDT on Thursday, Oct. 4 They called it the "reality distortion field." That's what people who worked with Steve Jobs knew was happening when the late Apple ( AAPL) chieftain pretty much made up whatever he wanted and knew he could get away with it. You knew you were getting snowed by Jobs when he said it was possible to come out with the impossible in a few weeks' time, or when he praised someone whom you knew he was about to fire. You knew that when he hated someone he might love someone the next minute. It was just his way, and he could get away with it because he succeeded so often and was right so often and had a crystal clear image and view of what he knew the customer wanted -- even if the customer didn't know herself, which was far more often the case than not. This morning, we interviewed Meg Whitman, CEO of one of Apple's biggest competitors, Hewlett-Packard ( HPQ), on "Squawk on the Street." To crib from one of the greatest debate lines in history -- Lloyd Bentsen's zinger to opponent Dan Quayle in the vice-presidential debate of 1988 -- we knew Steve Jobs, and Meg Whitman, you are no Steve Jobs. Her reality was certainly distorted, in my opinion, but unlike Jobs, there's no particular reason to believe that, alas, her distorted reality will ever materialize. First, I found this morning's interview painful -- maybe because debate talk was in the ether, maybe because Whitman tried and failed to be governor of California. The CEO came off as a politician, unwilling to answer any question about how she could save Hewlett-Packard from going the way of other hardware companies that couldn't keep up. She talked a cheerleader's game about 320,000 dedicated Hewlett-Packard employees, which by my count, may be perhaps 100,000 too many. She didn't answer how she could stop Apple from storming the enterprise gates. She didn't make a real case for why a hardware model still worked. She didn't explain how things could have gone so awry. She made no case for owning the stock whatsoever, and ruled out a wait-until-next-year turn by saying that it will be 2014 before we see any positive results from the company. I hope that "reality" isn't distorted, too.