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These five economic barometer stocks point to a higher market: Alcoa (AA), Pepsico (PEP), CSX...
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Friday, October 15, 2010, 5:55 PM ETThese five economic barometer stocks point to a higher market: Alcoa (AA), Pepsico (PEP), CSX (CSX), Intel (INTC) and JPMorgan Chase (JPM). They tell us that we’re shipping more goods, sales are improving, capital expenditure is rising in key areas such as consumer goods and railroads, and credit card debt write-offs are declining - in total, much more revealing than GDP numbers.
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She may be right, but this is "stock the shelves" time to get ready for Black Friday.
That doesn't mean all the crap they put on the shelves (real or online) will sell.
The only thing stock prices tell us is that buyers are willing to assume more risk.
Anything they may say about the economy is left to each investors' imagination.
The JPM chart looks to me, personally, like Housing Crisis Part II is about to unfold. But shut up and keep buying, right? QEII should smooth over the rough patches.
LOL! Is she whispering when she answers the phone too?
AA
Revenue 2008: $26.9 bn
Revenue 2009: $18.4 bn
2010 not close to 2008 levels.
PEP
Revenue 2008: $43.2 bn
Revenue 2009: $43.2 bn
(I don't follow PEP closely, but my understanding is that they've been busy acquiring bottlers, goosing revenue and income - i.e., not wholly organic growth)
CSX:
Revenue 2008: $11.2 bn
Revenue 2009: $9.0 bn
2010 revenue projected below 2008
INTC:
Revenue 2008: $37.5 bn
Revenue 2009: $35.1 bn
2010 set to beat 2008 revenues
JPM:
Revenue 2008: $73.0 bn
Revenue 2009: $66.3 bn
2010 revenue projected below 2008 revenue
Recall that half of 2008 was a disaster, so 2010 would have to significantly beat across the board before I even begin to think about headlines like this. Also keep in mind that the consumer is not strong right now, and shows no sign of getting any stronger. It is possible that recent consumption may be based off record foreclosures freeing up disposable income. That has now been halted indefinitely.
You have 3 out of 5 with 2010 revenue below 2008. One is set to beat due to acquisitions, and then you have Intel riding Asian growth. Compare these facts to:
"They tell us that we’re shipping more goods, sales are improving, capital expenditure is rising in key areas such as consumer goods and railroads, and credit card debt write-offs are declining - in total, much more revealing than GDP numbers."
Again, totally ridiculous headline.
How about some crushed ice for the water, an Oxycontin, and would you hand me my rose colored glasses on the credenza please?
Citi's a BUY, I can FEEL it!