Holy mackerel: is anyone paying attention? I wasn't. A reader alerted me. Look at AAPL:
- AAPL futures: up another $1.14 -- now trading at $211.34
- euphoria begets euphoria
- and Abraham beget Isaac (1 Chronicles 1:34-36) -- one of Trump's favorite books in the bible, but I digress
- why (the jump in AAPL)?: Chinese-US trade talks resume
- Tim Cook had dinner with Donald Trump this past weekend
- Tim's #1 concern: his #1 market ten years from now -- that would be China
- Tim's #2 concern: quarterly earnings reports
- three business days later, the press reports that US-Chinese trade talks resume
- on a side note: AAPL pays its dividend today -- 73 cents/share, I believe, could be wrong;
- for every thousand shares, one account will grow by $730 -- is that correct? that sounds like a lot; whatever
- if AAPL opens at its current price, it will set another all-time record
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Walmart
Holy mackerel: is anyone paying attention? Apparently a lot of nimble traders. WMT is up 10% in early trading.
Look at these numbers --
- 2Q18, comparable store sales: up 4.5%
- consensus: 2.2% growth
- wow -- talk about a huge miss by the analysts
- CEO says this is the best quarterly comp sales results in a decade (need to fact check)
- adjusted earnings of $1.29/share, beating estimates of $1.22
- full year guidance raised from $4.90 - $5.05, up from previous guidance of $4.75 - $5.00
- bright spot: e-commerce
- Amazon? Monopoly? What monopoly?
- Walmart looks to grow sales by 40% for the full year -- I could be way wrong, but I doubt Amazon is going to grow sales by 40% for the full year -- but if they do ---wow, wow, wow -- think about twhat this means for the US economy -- making America great again
- most of its sales: groceries and household staples
- fresh food sales: best grocery comp sales in 9 years
- but rolling out "premium" brands
- more than 1,000 new brands have been added to Walmart.com this year which is a key focus for the company
- Omni-channel: key area for Walmart, especially online grocery service
- tariffs? Walmart noted it but sounds unconcerned. Remember: Walmart, at one time, had a huge focus on "Buy American." I doubt that culture has changed much. From the CFO:
" ... in all of our markets where we have stores and eCommerce
operations, the majority of our merchandise is purchased locally in that
country. In fact, we buy more merchandise, by a wide margin, in the
U.S. than from any other country.
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Mid-Morning Trading
Selected --
- Dow: up 330 points
- NASDAQ: up 52 points
- S&P 500 (the only one that really matters): up 20 points
- WTI: flat at $65 -- many, many reasons -- the relatively large plunge of 4% in past few days has to be due to fundamentals like US crude oil inventories, but some of it, maybe a dollar or so per bbl has to be related to the very strong dollar; another dollar or so due to fears of Turkish contagion
- AAPL: up an astounding $2.00, a 1%jump -- it's astounding because --
- it didn't take part in the "correction"
- it continues to rise despite being a huge, mature fashion company
- it continues to rise despite the Chinese trade war
- WMT (after reporting best sales in a decade): up an astounding 10%; up $8.72 cents; still trading below its 52-week high of $110; trading at around $98;
- I won't look at the others of the high volatility over the past few days; will look at everything when the dust settles -- but, wow, what a buying opportunity
Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here.
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Jobs
- consensus: 213 to 220K
- actual: 212K
- prior: 214K (revised)
- change: down 2,000 from previous week
- previous weeks have set all-time records, so I assume this continues the trend
- the
range was 213K to 220K; not only did the actual number come in below
the consensus, it was a whopping 8K below the high end consensus number
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Commodities
A reader sent me
a link to this Bloomberg article, more on the China trade war.
This was my unedited, not-ready-for-prime-time reply:
Thank you. I don't follow commodities (other than oil, natural gas)
as a rule, and don't really understand the nuances. So, I'm probably
"missing" much of the point of the article.
However, this paragraph jumped out at me:
The People’s Republic accounts for about half of global consumption of most metals.
As we’ve argued before,
that’s hard to square with levels of demand in comparable industrial
economies, even when you strip out the effects of export trade.
It’s at
least as probable that the numbers have been driven by the orgy of
fixed-asset investments that’s caused Beijing to build railways and pipelines to nowhere, the world’s most sophisticated long-distance electricity transmission network, and enough copper-wire-filled homes to house half its population over the past decade.
Translating:
China's consumption of metals -- assuming the data is correct -- is way
out of bounds -- what one would expect a country of China's size/GDP to
be consuming. China is consuming way more metal than it can possibly
use, if I am reading the Bloomberg article correctly.
"...
to build railways and pipelines to nowhere...." --- if that's accurate,
and, "... enough copper to wire half its population over the past
decade ..." that suggests to me that China is spending a lot of its
"trade imbalance" dollars on public works projects to keep its millions
of young men gainfully employed.
Now adding: this paragraph --- repeating --
The People’s Republic accounts for about half of global consumption of most metals. As we’ve argued before,
that’s hard to square with levels of demand in comparable industrial
economies, even when you strip out the effects of export trade. It’s at
least as probable that the numbers have been driven by the orgy of
fixed-asset investments that’s caused Beijing to build railways and pipelines to nowhere, the world’s most sophisticated long-distance electricity transmission network, and enough copper-wire-filled homes to house half its population over the past decade.
-- is something I would expect to read in a blog. But this is done by a recognized professional, reliable, credible source, Bloomberg, adding gravitas to that paragraph.
By the way, if you go to the linked
Bloomberg article, it will take you to other great stories that substantiate their claims, especially the "
railways and pipelines to nowhere."
We've seen this movie before: five-year planning at the central (Federal) level -- China, Russia, Venezuela, Cuba -- vs free market capitalism in the US.
We have some bridges to nowhere, but very few -- and they were pork-barrel projects sponsored by a few key US senators in return for their votes for something more important for Congress at large.
By the way, there is a new theme in those
Bloomberg articles, something I was unaware of: the Chinese labor force is declining for the first time in a decade (or something like that) just as China introduces its "Belt and Road" vision. Even with that decline in the labor force, I still maintain China needs to keep its young male population gainfully employed.
But now we have three reasons why China needs to get back to the bargaining table regarding trade:
- keep the young male population gainfully employed
- fund the state's "Belt and Road" vision (just like Saudi Arabia's Vision 2030)
- keep their Chinese bankers from committing suicide as the banks start to fail
