The market raced up today as if it were Icarus escaping from Crete and rapidly approaching the tantalizing Sun, though with luck it used better wings and thus will avoid the same fate. Despite more negative macro news, a growing and unsustainable debt, and more longterm unemployed people than a fast food addict has bacne, the market is responding positively to a number of earnings reports because apparently four or five data points are much more relevant than the last 3 months of data, statistics, and common sense.
In macro news, new claims for unemployment were out and as usual, were much worse than analyst guesses. Claims rose by 37k to 464k (though next week that number will likely be revised to 470k, because that's how the (NO) Labor department rolls). Analysts were only slightly off in their predictions of claims rising by 17k and by slightly, Money McBags means whatever the opposite of slightly is, like considerably, greatly, or a fuckload. But hey, only 45% of the 14.6MM unemployed people have been out of work for more than 6 months and if that doesn't scream market rally, then nothing does (and of course that number doesn't include people who simply stopped looking for work as they became more discouraged than the Edsel's marketing team or Stevie Wonder's shoe polisher after Mr. Wonder downs a Big Gulp and hits a urinal).
In other macro news, existing home sales fell by 5.1% but since analysts had guessed they would fall by 8.1%, the market reacted positively, choosing to ignore the absolute for the relative, which is a bit like getting excited about your daughter sleeping with Magic Johnson and only coming away with herpes. There are 4MM homes on the market which at the current sales pace equates to a 9 month supply of homes which is bad news for sellers but good news for that one guy looking relocate. And finally, the index of US leading indicators fell .2% but that was .1% better than guesses so another pyrrhic victory for the market to celebrate while it ignores the bigger picture like King Pyrrhus ignored the replenishing forces of roman soldiers.
Of course the big news today is earnings where several companies beat guesses, put out better guidance, and did it all with a straight face. UPS beat analyst guesses and gave above street guidance thus figuratively dropping a deuce on estimates and showing what brown can really do. New guidance was for $3.35 to $3.47 per share which was well above analyst guesses of $3.27 per share and driven by their international business and more people buying shit online since they can't afford gas for their cars. Obviously an increased pace of shipping bodes well for a recovery somewhere so hopefully the uptick is a result of real business needs and not companies shipping left behind picture frames to the people they laid off.Caterpillar is another company that put up a huge quarter which made more than just lepidopterists happy. The company crawled its way to 31% revenue growth and 93% profit growth while raising their guidance and destroying analyst guesses as if those guesses were freshly laid ant larvae. EPS was $1.09 and guesses were for $.85 eps and in this market,...READ MUCH MORE....ANALYSIS OF KITD's PREANNOUNCEMENT....
Disclosure: Long KITD