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 (FRED), Kroger (KR), Safeway (SWY), Longs Drugs (LDG), Sysco (SYY), United Natural Foods (UNFI) and Walgreen (WAG) which is a client holding.
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.
Proud Member Of
Random Roger
© 2009 | Gadget Theme Blogger Template
Original WPtheme By Blogger Template | Converted By Gadget Lover
| Distributed by eFree Blogger Help
Original WPtheme By Blogger Template | Converted By Gadget Lover
| Distributed by eFree Blogger Help
10 comments:
Both the fact that the Resteraunt Suppliers are suffering and Supermarkets are doing well are bearish indicators IMO. For the demographic whose income is under 100K per family, less disposable income from higher energy prices (gasoline) means less trips to eat out and more meals at home. For fixed income poor people, food is not optional but prescriptions and phone service are. Tom in Indy
typically, where the market is concerned, prescriptions are thought of as not optional.
Medicare D has helped out the elderly poor. When they have been enrolled in a plan. If they have income <6000$ (FPL) per year they can get the insurance for free. I am a pharmacist in a poor area of Indy. I helped a lot of white haired ladies get signed up for plans. Prior to D they would have to make choices based on how much money they had in their purses/wallets. Food, Rent, Power, Heat, Drugs, Gasoline, Phone, Beg from the Kids. Tom in Indy
I buy in to what you are saying, but the market treats these stocks the way they treat them which is not opitional.
Real world vs Wall Street's view of it.
mark h is a joke. they need to replace these talking heads with some real people like yourself.
Real story is professionalism of Mr. Haynes.
When Fox starts their Business News channel next year, CNBC will start running infomercials all day like they do now during the weekends.
g
Good site. Keep up the good work.
Andrey at stockforlife.blogspot.com
In regards to consumer health, I just reviewed Realty Tracs'August foreclosure rate for single family homes. Foreclosues in August were up 24% sequentially to 115,292 homes in one of the three stages of foreclosure. The rest of the report is a bit lenghty. I address the issue and opine in my blog today.
I believe consumers are doing just fine. It's the commercial hype that makes many feel justified in CONSUMING beyond their means, thus creating a victim mentality which is preposterous.
As for restaurant suppliers doing poorly as a bear market indicator, maybe the real reason is that too many average, bland,greasy, poorly-managed chain restaurants were overbuilt in the past decade and the consumer is discovering that healthy meals at home are just a better choice. That's good news.
Is the "consumer health" really an issue? Who cares?
These stocks are tradeable based on technicals without regard to the broader economy. WAG and KR have both shown up on scans for recent three-year highs with volume confirmation, and that makes them good trades, consumer be darned.
Just a thought.
My opinion, you have to try hard to make Mark Haine look not silly.
Sadly Mark H is probably the most intelligent person on CNBC. I remember when Dave F. made a recommendation to buy GM in the 30's. Mark H was like "you're kidding". Within months GM nose dived. I'll always remember that pick, good comedy is on TV, really!
Post a Comment