Corporate earnings are looking to reclaim the spotlight and reignite the rally as technology had a slew of impressive results after the closing bell yesterday. Winners included two companies ridiculed for not accepting takeover offers...maybe they did the right thing after all?
So Much for Transparency
The White House is in a serious pickle...it used all its ammo on a stimulus plan that redistributed wealth and boosted welfare and food stamps but only created 30,000 jobs. The "cash for clunkers" deal didn't ignite so-called animal spirits, and all the profits went to Tokyo. And, extending unemployment benefits just isn't the same as creating jobs. On the drawing board are more spending programs, including Stimulus II, COBRA subsidies, and the first-time homebuyers' tax credit program. The list goes on and on.
Yesterday, Ben Bernanke fired a salvo at the Administration when he said that we need a clear fiscal plan. The thing is that the White House had been coming out and taking victory laps for so-called green shoots all year long and now they're in a bunker somewhere presumably to hash out healthcare, which was supposed to be done on C-SPAN. I was really looking forward to seeing the bill played out for all to witness. They say everyone likes sausage but nobody wants to see how it's made. Well, I was ready to see how this sausage was made, and like many I'm disappointed. We've seen all the bills so there couldn't be anything shocking, except maybe the real pork being stuffed into the plan and elaborate ways to dress up the Trojan horse.
Now I'm nervous. As much as those premature victory laps annoyed me it was better than the Administration holding court in secret while the most critical aspects of healthcare and other issues are being addressed. I think that they are afraid and ready to hit the red box marked: In Case of Emergencies Only. The White House has to know that deficit spending just isn't appealing to most Americans, so it's time for a diversion. Not sure what it's going to be but brace for something that will make headlines and try to divert attention from the next round of reckless spending.
Thoughts from the WSS Research Desk
- Boeing (NYSE:BA) reported earnings this morning that were far worse than the Street was expecting and guided its fourth quarter far below consensus as the aerospace giant continues to struggle. The Street knew the Company would report a large loss on plane charges, specifically related to the Dreamliner 787 and revamped 747. This makes four out of the past five quarters that Boeing has fallen short of consensus. Oh and the Dreamliner 787 is only like three years behind schedule.
- Cadbury (CBY) reported a third quarter increase in revenue and raised its sales and margin forecasts for the year, raising the bar for Kraft (KFT) if it wants to continue with its proposed takeover. The $16.7 billion offer was already rejected and Cadbury indicated it would need a higher price, after today's announcements, that price tag looks to increase even more.
- Wells Fargo (NYSE:WFC) reported a profit of $3.2 billion during the quarter, and initially trading higher in the pre-market, shares are trading lower as the Company's loan losses swelled as well.
Written by Charles Payne, CEO and Principal Analyst of Wall Street Strategies (wstreet.com) providing independent stock market research to over 30,000 subscribers, in more than 60 countries. Mr. Payne is a regular contributor to the Fox Business and Fox News Networks. For more information about Mr. Payne, please refer to the company’s website www.wstreet.com.