Roger Nusbaum submits: An analyst from BB&T Capital Markets was on CNBC a few minutes ago, and I think he had a tough time because it looked like he was working very hard not to make Mark Haines look silly.
The analyst covers mostly drug stores and super markets. The lead-in to the interview was how strong these stocks have been this summer.
The stocks on the graphic that he covers were Fred's, Inc. (FRED), Kroger Co. (KR), Safeway Inc. (SWY), Longs Drug Stores Corp. (LDG), SYSCO Corp (SYY), United Natural Foods,Inc. (UNFI) and Walgreen Comp. (WAG), which some of my clients hold.
It was these stocks that were discussed in the interview. Mark jumped in by asking: If you believe the market is a discounting mechanism, then these stocks are telling us the consumer is just fine.
The guest analyst was stymied. He steered the conversation to restaurant stocks and more specifically restaurant suppliers. He noted the suppliers have been beaten up lately.
The consumer may be fine. But drawing this conclusion by looking at staple stocks makes no sense. Staples tend to provide leadership as the stock market starts to discount (to use Mark's word) slower growth or recession. Sales of prescriptions and relish are not a way to measure the health of consumer spending.