http://seekingalpha.com/news/market_currents/post/28716 Thursday, July 23, 2009 12:45 PM Housing numbers strong? Blah. * June Existing Home Sales: +3.6% to 4.89M/year, vs. consensus of 4.77M. They're 0.2% lower than a year ago. NAR chief economist Lawrence Yun says he expects the gradual uptrend to continue, and continues to gripe about new appraisal standards which he says are resulting in lost sales. Jobless claims encouraging? Meh. Initial Jobless Claims: 554K, up 30K from a week ago (revised), better than the 560K consensus. Continuing claims fell 88K to 6.225M. The Pragmatic Capitalist says the only news that matters today involved a company in the middle of almost every transaction, and thus in every recovery: United Parcel Service (UPS +3%). And UPS is not confident. http://pragcap.com/the-only-news-that-mattered-today-3 THE ONLY NEWS THAT MATTERED TODAY 23 July 2009 Forget the seasonal strength in the housing numbers. Jobless claims slightly better than expected? Who cares. UPS reported their earnings today. Thatâs all you should care about. UPS and FedEx are, in my opinion, the two best barometers of economic growth in the world. While the market rips higher on âbetter than expectedâ earnings and the strong housing numbers they are completely overlooking the fact that UPS sees no signs of recovery. As a middle man in almost every transaction it is nearly impossible to see a sharp recovery that UPS is not involved in. CFO Kurt Kuehn had these comments on the call this morning: âOur trends so far in July show no material uptick in growth, We donât have any confidence that either demand or activity is going to pick up substantially.â And directly from the earnings release: âThe economic environment continues to be difficult. Declines in both our domestic and international businesses appear to be stabilizing but volumes will remain significantly below last yearâs levels,â said Kurt Kuehn, UPSâs chief financial officer. âAlthough declines in economic indicators are less dramatic than earlier in the year, questions remain as to when business activity will begin to strengthen,â he continued. âThe business environment in the third quarter should be similar to the second quarter. Meanwhile, on the other side of the pond Deutsche Post DHL is reporting similar sentiment. CEO Frank Appel says: âWe still donât have a clear view of . . .further economic development. Though economic conditions havenât worsened â with new business bustling and our strong market position in Asia â we are not yet seeing any substantial improvement.â So, the stock market is now getting very euphoric while the underlying fundamentals still show no real sign of a strong recovery. Iâm making a list and checking it twice. Although my S&P 1,000 call is still intact, itâs time to start planning for a tactical short position in this environment. The fundamentals donât rhyme with this this market action in the last few weeks.
Well, if you believe that consumers lead the way, and that UPS and FedEx are good indicators of levels of consumption (as many do), I'm sure that if one is a shrewd and relatively risk-receptive trader or investor, there's some utility in it. But maybe not. Maybe UPS & Transports don't matter nearly as much as they used to, or something much larger is at work, at least temporarily nullifying what UPS is telling everyone.
Something like this? http://www.youtube.com/watch?v=wiSzbqFUQNs or http://www.youtube.com/watch?v=J2jMizWAgVw
news don't matter, fundamentals don't matter (because you can't base your decisions on it if you don't trade on hope) , it's a casino .