- the market's positive tone; and
- the real problem with Intel.
Everybody Wants Some Posted at 4:09 p.m. EST on Friday, Jan. 18 What happens if there is a debt deal and earnings are good? Well, we are pretty much looking at what happens. With General Electric ( GE) and Schlumberger ( SLB) reporting numbers that pleased the Street, and with the possibility that Washington won't go all Defcon, you get that same benign lift off that we have come to expect from this market in 2013. Look, there are plenty of flaws in the market today. Google ( GOOG) and Apple ( AAPL) can't get out of their own way, which market players are telling me means the shorts are circling ahead of next week's earnings. There are plenty of worries in the financials. Capital One ( COF) did report a nasty quarter, and the big banks actually seem like good shorts at this moment. But the POIs -- the plain oil industrials -- are trading on a Chinese comeback that will not be hindered by Washington. And the bounce-back factor, the rally after bad news, continues with Chipotle ( CMG) miraculously almost back to where it was when it dropped the bomb on the comps and food inflation the other night. Plus, there's no negative pin action. CSX ( CSX) gets downgraded today off coal, and normally that would send uber-coal player Norfolk Southern ( NSC) into the dumpster. Instead, it is higher. That's classic benign action. People want in. They fear deals being done over the weekend, in Washington or Wall Street. Just a very strong, swift, bullish market, a five-year high for the Dow and the S&P 500 on nice earnings, and peace in Washington. A very different, very positive combination. Random Musings: Lots of heat about the stocks that go to $90 go to $120 comment. Of course, it was meant as a way to describe animal spirits. But if you want two that fit: Deere ( DE) and Monsanto ( MON)! ... Got a chuckle out of being mentioned in the Fed minutes from the August 2007 meeting. They were laughing about my "They know nothing" rant which, by the way, no one ever acknowledged I was right about or that I was even paid attention to until Tim Geithner said it at CNBC's Delivering Alpha conference a year ago.
You Won't Have Intel to Kick Around Posted at 7:22 a.m. EST on Friday, Jan. 18 No, I won't. I refuse to feel sorry for a company that generated $6 billion in cash flow for the quarter, that spent $2.5 billion for new capital equipment to stay ahead of the game and still paid out $1 billion in dividends. I am not going to cry over a company that had $11 billion in net income and had gross margins of 63% for 2012. That's right, I refuse to feel any remorse for Intel ( INTC) and its inability to hit it out of the park any more without very strong gross domestic product growth worldwide and customers that are able to do better than ones who use the other guy's chips. And this time it isn't Advanced Micro ( AMD), but ARM Holdings ( ARMH). One could argue that you have to empathize with great American businessmen, premier manufacturers that simply can't grow fast any more, where low-single-digit revenue growth is becoming the norm and where you have to hope for a hockey-stick recovery in 2013 to get some real growth going. Frankly, going into the quarter I expected more. Call me dated, but I thought the Windows refresh cycle would have more of a positive impact. Instead, Intel seemed to be hurt by the inventory clearance in older, Windows-7-based PCs. The burgeoning data center orders couldn't make up the difference. Intel had also hung its hat on a huge ramp of the Ultrabook, but the tablet pretty much boxed that out. Plus, on the conference call Intel talked about the confluence of phablets (phone-tablet hybrids that are larger than smartphones, but smaller than plain old tablets) and how those are up-and-coming devices. Intel will have product for those markets and it lays claim to the mantle of offering the fastest and the lightest and the longest -- the usual superlatives -- with their new chips for that slice of the computing pie. In fact, it makes the point that Intel will have something for everything that is computing related that is competitive to anything anyone else has. Good.