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Make America Greater By Embracing Greatness By Charles Payne

Donald Trump: "I love the poorly educated."

The Trump Train keeps moving along. It has become a locomotive on the verge of crashing through political orthodoxy and providing hope for a lot of people who feel their place in the nation and in the world is passing them by. Furthermore, it encompasses a lot of Americans across all racial and political lines. Americans should be afraid that after making a bet that a progressive president could make things right by re-litigating the past and is somehow able to put everyone back to "GO" like in the game of Monopoly where we'd all get a "fair" chance.

The real world doesn't work that way.

The result of the attempts in engineering to punish success, stalling financial momentum, embarrassing job-creators, and bludgeoning nascent dreams of individuals who may have once considered being extraordinary is an American economy that looks and acts like the dying economies of Europe. There are the disheartening economic realities of outcomes from the avalanche of higher taxes, fees, and regulations. There is the crushing reality that the Affordable Healthcare Act has made life more expensive and miserable for individuals and small businesses.

The nation is crestfallen and looking for solutions.

One solution might be to get back to a nation that revered winning and winners. The Welfare Utopia progressive have cobbled together, it isn't just about how much the government can reward folks for not working, but it also covers things like participation trophies and the ambush of free speech on college campuses. In essence, society-shapers now ask/demand less from an individual, yet promise to reward the individual with more; this is so counter-intuitive, it will always be doomed for failure.

As much as I would like to think this is only an American trait, where self-interest is perfected in a way that the entire society benefits, even competing and winning is seen throughout the animal kingdom.

So, here we are limping along…people are demanding more than hope. They want a plan and they will vote for one in November.

Options:

  • Creating a backdrop that allows the individual to determine their own destiny = capitalism.
  • Creating a world that cares; cradle-to-grave for individuals = socialism.
  • Extend the world that narrows a path to success, attempting to take from the few to reward the many= Obama-ism.

Back in 2008, the world was in a financial meltdown; universally, all the blame was on Wall Street, which became the proxy for all business sectors and of course, capitalism. Europe was blamed for 'Anglo-Saxon' capitalism. Against this development, America rejected the idea that one of the very pillars that made it the greatest nation to grace the face of the planet was somehow a mistake. It didn't help that Republicans didn't defend capitalism, and their nominee for the White House voted to bailout banks.

Once you bailout the evil-wrongdoers, everyone should be able to get a break from the government.

There was 2012, where the epitome of American Success walked straight out of central casting. Mitt Romney had the resume in both government and the private sector, but he allowed his own success to be used against him. His work at Bain Capital was the primary target of the left, including mainstream media. The deals that didn't work out or the jobs that were lost during reclamation projects became the symbols of Romney, Wall Street, and capitalism. He never fought back with the kind of pride and lack of remorse for making it, which is what Donald Trump does every time he opens his mouth.

In Trump's world, there are winners and there are losers. In his world, success and the rewards that come with it are wonderful -he can never get enough. If Romney used this playbook, every America would know that he actually funded a start-up called Staples; he helped to stock the shelves before the opening day of its first store. Staples have and continue to employ hundreds of thousands of Americans over the years that were able to feed their families, purchase homes, and send their children to college.

It's not only Staples, but Romney funded dozens of businesses during his years at Bain:

  • Staples
  • Domino's
  • Sealy
  • Experian
  • Sports Authority
  • Brookstone
  • Waters
  • Steel Dynamics

Romney allowed his success to be portrayed as a failure. Now, more and more Americans are looking to Donald Trump to bring his success to the White House, and to create a backdrop that brings the motivated individual to succeed regardless of their educational level or place in the economic hierarchy of the nation. That's a key component of America's success versus the rest of the world- the ability to change your lot in life based on effort, determination, and a system that rewards success.

I haven't made up my mind on the election, but I want the next resident of the White House to cast an aura where all Americans know they can work hard and be rewarded, and maybe even get rich because it will no longer be a four-letter word.

Market

Once again, we are seeing signs that consumers are spending, albeit on a very selective basis. T.J. Maxx (NYSE:TJX) and Target (NYSE:TGT) enjoyed a strong session; after the close, Restoration Hardware (NYSE:RH) dropped a bomb, and the stock was hammered.

After months of cheap gas and higher savings, consumers are heading to restaurants and stores with the best values (doesn't always mean the cheapest prices). I know it would happen and I felt one of the winners would be Target. Yesterday, the stock rallied 4%; on almost a 200% increase in average daily volume…I think the Street will jump on the bandwagon.

Moreover, comparable store sales blew away consensus of 1.4% growth, driven by online sales that differentiated the company from its rival Wal-Mart (NYSE:WMT). Target's free shipping without ticket limits is more attractive than the Wal-Mart $50 minimum. I am also encouraged by a slower decline in units per transaction and its maintained pricing power.

TGT
Business Trends

4Q15

3Q15

2Q15

1Q15

4Q14

Comp Sales

1.9

1.9

2.4

2.3

3.8

Transaction

1.3

1.4

1.6

0.9

3.2

Units Per Transaction

(1.3)

(2.1)

(2.9)

(3.9)

(3.7)

Average selling Price

2.0

2.5

3.8

5.1

4.5

The company actually missed its consensus on top and bottom lines, but guidance was robust and confident. The high-end of full year guidance is $5.40, but the Street modeled for $5.16.

TGT
Business & Execution Trends

4Q15

3Q15

2Q15

1Q15

4Q14

Gross Margin

27.9

29.4

30.9

30.4

28.5

EBITDA Margin

9.8

8.6

10.9

10.5

9.8

Earnings versus Consensus

-1.3%

0.0%

+9.9%

+6.8%

+2.7%

Management points to success in Star Wars for strong toy growth and 4% comparable growth in those locations that feature home décor. (I love the stuff they sell; it reminds me of highly successful Home Goods offerings.)

The bottom line is that folks bought more gasoline and folks did a lot more shopping, not on the high-end level where one of my favorites (although thankfully we are not long) Restoration Hardware, was crushed after a big miss.

Still, even if it's on the edg and at lower-end retailers, there are signs of life.

Today's Session

Those signs of life continue. On the earnings front, Kohl's (NYSE:KSS) and Best Buy (NYSE:BBY) are higher after posting mixed results and unenthusiastic guidance.

There are interesting trends at brick and mortar stores and we're going to delve into this deeper. But, these guys are trying to survive in the world of online shopping and Amazon. Speaking of online shopping, I'm impressed with the pre-opening reversal in Wayfair (NYSE:W), but observing, not buying.

Intrigue of the Day

China's Shanghai market got slammed 6% overnight, and after failing to overtake 3,000 on the upside, must fight to hold onto a double bottom. Despite the slaughter, global markets have remained calm, and we opened higher. It's one thing for our markets to react to China demand and currency, but maybe we should be down because the Communists are having a tough time propping their stock market.

Shanghai