Honest Abe's Rules of Thumb: Cliffs Notes Edition"Relative outperformance of higher growth sectors, supported by indications of accelerating macroeconomic trends, is a sign of changing future fundamentals." Many eyes have turned to data improvement in September vs. August as packing the punch to reactivate the rally. On Tuesday, the new dot-connecting exercise was that upside in industrial production meant a manufacturing employment revival -- which had lagged -- and, along with it, longer workweeks and checks to offset gas inflation. All in, this was to drive a very merry holiday season. The industrial and retail complexes percolated in the face of subpar earnings from W.W. Grainger ( GWW), WD-40 ( WDFC) and Wolverine Worldwide ( WWW). There are some mighty rosy assessments here, but it still doesn't sit well with me, seeing as TJX Cos. ( TIF) has plunged, and it's absurdly clear that Europe's industrial performance was horrendous, causing a double-whammy of missed third-quarter earnings and lowered expectations for the balance of the year that exceeds the third quarter shortfall. So I render this rule of thumb as not being truthfully satisfied.
Earnings-Season Rage Out Session
- I have been on VF Corp (VFC) since the middle of the year, and the silly weak quarter from Wolverine Worldwide emboldens that call. On the watch list: Jones Apparel (JNY)
- Tiffany's (TIF) current price levels worry me. This leaves the stock susceptible to downside into a third-quarter earnings announcement -- and guidance for the holiday season -- that should be less than stellar.
- On July 30, I stood outside in some light rain with my pal Debra Borchardt and trumpeted the virtues of owning Swift Transportation (SWFT) for the long term. If you bought, sell into strength, because I'm not feeling transport comments -- such as those from CSX (CSX) -- pertaining to operating ratios, sales mix and fuel inflation recovery.