Growth stocks have reason to rally
Two earnings reports have reignited the group, and now its their turn to shine in this bull market we're in.
We went out Tuesday night trying to figure out which track to be in and which horses to bet on. The early portion of Tuesday's trading was a victory for the industrials. But the latter part went to the consumer products players, which managed to put on a pretty stellar show. That shift was probably a reflection of the enormity of Emerson's (EMR) miss more than of anything good done at General Mills (GIS) or Clorox (CLX) or Dr Pepper Snapple (DPS), although the latter two made you want to buy them after you listened to their CEOs on "Mad Money."
Banks, of course, did well the whole day and gained steam. Techs started out hot and came out cold. Oils? Not bad, Take a look at Exxon (XOM), which, after its miserable quarter, is now nicely above where it was when it reported. Doesn't hurt that EOG (EOG) blew the doors off the operation.
But what we needed was something that reignited the growth-stock group. In a true bull market like we are in, one that has been confirmed by a 20% climb from the bottom in November, you need to keep all the balls in the air. The discussion is never about which stocks got hammered the worst. Or which sectors slipped and slopped in zero-sum fashion vs. the winners. That was the way we saw this market at the beginning of the bull. If drugs were up, cyclicals were down. Banks gave it up and foods took it.
That's not the case anymore. Now it is just sector move, sector rest.
Which brings me to Tuesday night's business, the shockingly fabulous number that Whole Foods delivered on top of the excellent number that Disney put on, although the latter will have nitpickers because of problems in plain-old broadcasting that will only come as a surprise to the troglodytes who don't care to know the available facts ahead of time.
Whole Foods was amazing. Do you know what it is like to repeal a whole new and awful misperception that the bloom is off the rose? That's what Whole Foods had to do. They had to prove that the business wasn't decelerating or that they weren't getting their butts kicked by Kroger and Trader Joe's, which had become the perception after last quarter's disappointment. They had to explain all over again why there really is room for a tripling of the store count. They had to discuss whether the desire for organic food hasn't cooled, a perception that Hain (HAIN) is fighting with right now.
They did it all. They made you feel that you could have five times the number of stores they have. All different formats and places, too. They even made you realize they haven't even tapped into low-hanging fruit like affinity programs that are working so well at like-minded places like Starbucks.
Excellent quarter. Fabulous comeback. And I loved the split because, heck, it is entertainment and the retail investors need something to keep them in to buy 25 shares.
Disney? Monster University good. You could hear the air go out of the room when CEO Bob Iger talked about the weakness at broadcast. Bob's like that. He doesn't shy away from the bad, although he did, thankfully, not put it up top. You didn't know the ABC weakness until you knew the movie, theme park and ESPN strength. Fine with me. Most people still haven't grasped what Iger's done here. He has given you a multi-year smoothness to earnings by putting money behind tent-pole movie releases that assure you that the quarter will be made. This is a man who tacks aggressively. We basically heard, no more "John Carter's." We are going with the proven. No need to do more than that. Remember, he's got Pixar, Marvel and now Lucasfilms to pick from. Why the heck does he have to invent new superheroes?
I figured that the people of small minds would say that broadcast is no good so you should sell. There's always something that's no good. May I remind the sellers that last time it was movies?
The time before that it was ESPN?
These are like flats on a car with spare tires galore. And Iger changes them on the fly, as this is Nascar not the Jersey Turnpike.
Pit stops will be made. Broadcast will be fixed.
But more important than that granularity is a recognition that the growth stocks have a reason to rally today. They've been stalled for about 72 hours.
Time to shine.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.
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Steve, remember a few months ago we talked about the 3 D printer. Saw an interview last night on Lou Dobbs with the kid that manufactured the pistol with it. Man this kid made me feel so proud. His main message for everyone in America, "Say no to central planning". He talked about the fundamentals of the first Americans and how he sees the present threat of a centralized bureaucracy and loss of personal Liberty. He says he has no political affiliation yet he categorizes himself as aligned more with the anarchists. Amazing, but not surprising, how smart many young people are in recognizing the perils of the masses being misled by despots who purportedly are looking out for their best interests by demonizing the rich haha and assuming a position of central authority.. I think most of us know where that ends up. A superb young American in my opinion.
ABS....Not to belabour the point....But you can hang several of those problems and put Congresses head on the pole too...
The Money and sometimes, something good has to start THERE...
And don't believe I said anything about giving Obama a "free ride"....Hardly..
I'm not really happy with many situations, nor our Progress as a Nation..
As far as the Markets, I'm somewhat estatic as a retiree; But the Market isn't exactly the Economy.
Suicide bomber kills 12 and injures 51.
February 20, 2003, international diplomatic compound in Riyadh, Saudi Arabia
Truck bomb kills 17.
February 28, 2003, U.S. consulate in Karachi, Pakistan
Gunmen on motorcycles killed two consulate guards.
July 30, 2004, U.S. embassy in Taskkent, Uzbekistan
Suicide bomber kills two.
December 6, 2004, U.S. consulate in Jeddah, Saudi Arabia
Militants stormed and occupied perimeter wall. Five killed, 10 wounded.
March 2, 2006, U.S. consulate in Karachi, Pakistan
Suicide car bomber killed four, including a U.S. diplomate directly targeted by the assailants.
September 12, 2006, U.S. embassy in Damascus, Syria
Gunmen attacked embassy with grenades, automatic weapons, and a car bomb (though second truck bomb failed to detonate). One killed and 13 wounded.
January 12, 2007, U.S. embassy in Athens, Greece
A rocket-propelled grenade was fired at the embassy building. No one was injured.
July 9, 2008, U.S. consulate in Istanbul, Turkey
Armed men attacked consulate with pistols and shotguns. Three policemen killed.
March 18, 2008, U.S. embassy in Sana'a, Yemen
Mortar attack misses embassy, hits nearby girls' school instead.
September 17, 2008, U.S. embassy in Sana'a, Yemen
Militants dressed as policemen attacked the embassy with RPGs, rifles, grenades and car bombs. Six Yemeni soldiers and seven civilians were killed. Sixteen more were injured.
Watching Paint Dry.....Is always exciting for a Retiree...Now trim windows/walls and such...Ahhhh.
I'm ready for some whiskey on the rocks, on the deck...
Good job holding the Line CGT1, we'll keep you for another day....Maybe.
I called it somewhat close, got lucky...Manipulators worked in our favor at 3:15..
Great job CGT....We had a great day, a few Equities really popped, up 4-5% on a scant few..
Goldminers up almost 7%, that was the biggie, that I've checked on.
Lt. Danz is gone, so I'm on break, looking at what happened today....We be Happy.
Barry:You act like food stamps were just invented.I remember back in the 1970`s teachers
were getting food stamps in the summer when they were off.Come up with some new
lines.You can`t dispute my facts.Sorry you missed the bull market.I didn`t.
Barry S.You show up at Akron-Canton airport on May 22nd and we`ll compare
portfolios.If you want to box then, that`s fine.I grew up in the mean streets
of Ohio, where men are men and sheep are nervous.
Barry, You`re half right.Back in the 1970`s I did
drive a 1972 Pinto.Now I could drive any car I
want and I drive a Regal.I don`t want a driver
for a Rolls.Most of my huge portfolio is in my
portfolio.You probably still have a Pinto unless the rats in NY havn`t eaten it.
BTW.....(break from painting).
Markets maybe even, with slight possibilities of small upside?
But the 3:15-4 hour who knows at ending ? CGT1 has got to do his job and Hold the Line..
Otherwise we are gonna get us a CGT 2.....yukety, yuk.
I golf tomorrow with the old bastards....
We gonna have a rumble in the mean jungles of Buck-Eye Country??
Lt. Danz has been here,so we are working,putting on third and final coat of paint...
Markets will take care of themselves...I've got to get bizzy and crack the whip..
Lost last night at Casino....Miss Lilly hit big....Calls me the loser in the family..
More after the Close...
Barry, I`m waiting to hear what good points about GWB.Nobody else can find any.Reppublicans
change the subjectwhen you mention him.The GOP had their chance and they bombed.
Barry, need I remind you that 9-11 happened on GWB`S watch.If that had happened with a Dem in the
WH, our right wing media would constantly bring that up.I`ve got some Dow 15,000 hats
ready for you.Happened with a Dem President.What a surprise !
VERITAS:Good points.The far right wants to forget the countless terrorists attacks
that took place with WB and with Reagan.
Looks like a little migration, to Antman's bitch blog...
And the West Coast Crazies are lighting up about a mis-adventured Navy Buttership..
I've got clean-up to do and what a "great day."
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Growth came in below expectations, but that's just evidence of how far the economy has come.
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