Dell's quarter indicates a slowdown
We'll see lower stock prices until large companies say the downturn is only temporary.
So far, Urban Outfitters (URBN) is in a class by itself in saying that the last 10 days leading up to its conference call were disastrous in at least one of its divisions, Anthropologie. I am still reeling from that startling statement and have tried to back it up with others to be sure that URBN isn't something unto itself.
I didn't get it from Home Depot (HD), which didn't have anything negative to say at all. Last night, when talking to Steven Sadove, the CEO of Saks (SKS), I heard that the days leading up to the quarter have been business as usual, consistent with excellent metrics. I didn't hear it from Howard Schultz on Tuesday either, with Starbucks (SBUX) seeing no slowdown.
But last night on the Dell (DELL) call we got lots of evidence that consumer demand is "weaker and a bit more uncertain," which translated into a hideous outlook: revenue growth going from a 5%-9% increase, totally respectable, to 1%-5%, completely unacceptable, hence why we are seeing so much selling.
Their Urban Outfitters moment, reiterated several times like on the URBN call, specifically identifies "the last few weeks" as the time frame.
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Now, of course, it's easy to say that Dell's problems are Dell's and therefore Apple (AAPL) is taking share. We know that rap.
But I think if we are on recession watch -- and that's certainly the case after the budget fiasco -- Dell is an important indicator of a slowdown.
Here's how I think things will shake out. There are enough companies that aren't seeing a slowdown that prices may have come down too far during the big decline. But there are enough that have seen it that we didn't deserve the big repeal of the decline.
I think it will cut to lower prices until we see large companies like Dells say it was temporary.
Given that we just saw this decline, that's highly unlikely, and I don't think we can make up higher ground of any significance from here until we know more for certain about these fated last 10 days.
At the time of publication, Cramer was long Apple.
Follow Cramer's trades for his Charitable Trust.
Currency trader, you need to look a little harder at the facts.
It was under Clintons watch that they decided all americans regardless of income should be able to buy a house. Banks were forced to make loans to those who could not afford them. The wheels were put in motion. Now we have all these bad loans out there and the banks are being punished for doing what they were forced to do.
Corporate taxes where lowered under Bushes watch to reduce the outflow of jobs to countries with lower corporate tax rates.
Now under Obama's watch we are trying to spend our way out of debt.
And threatening to over tax corporations who will in turn move more jobs away.
Do I disagree with everything Clinton did, No.
I also don't agree with everything Bush did.
I would have a difficult time finding anything about Obama that I can agree with. Other than he seems to be determined to destroy the USA.
I am not a democrat or republican, I am a lower middle class american who understands that you can't spend your way out of dept. Nor can you tax your way to prosperity.
Get rid of the loop holes and lower the tax rates. You will create an environment where companies will hire more people who in turn will pay taxes, buy products, and build prosperity for this once great nation.
The US government has doubled in size in less than a decade.
Most government jobs pay more than private sector jobs and the benefits are better.
Who is flipping the bill for those jobs.
Those big corporations that some are wanting to tax away.
Tax them, watch them leave, then someday we will all be remembering a time when you could get unemployment when you were laid off, and Social Security when you retired, medicare, disability or workman's comp if you were hurt, and all the other benefits many now receive. Because they will all be gone. No more corporations to tax to fund these entitlements. No more jobs for americans.
People need to wake up and face reality.
You can not continue to tax the wealthy into poverty.
Like it or not the wealthy supply most of the money that our government spends and borrows against.
We can not afford as a country to continue giving entitlements to 51%. That means just slightly under half the nation is supporting the rest of the nation. Get a clue. OK increase taxes on businesses and what will they do. 1st they will raise the price of their products to pay for the taxes. Who really ends up paying the tax. Then they will move more jobs to countries with lower tax rates. The USA has one of the highest corporate tax rates in the world. If you are lucky enough to still have a job today how do you think they will be able to compete in a global market and create jobs, let alone keep you employed.
We are going to tax ourselves out of jobs because so many people think they are entitled to govenment aid that the rest of us work and pay into to provide.
Where in the Constitution does it say you have a right to live of off the government.
I am not saying there are not those who deserve government aid but there are as many who don't that get aid as those who do. I see it all the time.
People who are completely capable of working even bragging how they have beat the system. Yes they have and they are also helping to bring this once great country to it's knees.
This was supposed to be the land of opportunity. Where anyone can try to live their dreams. One could build their own company and hopefully become profitable. And others would applaude, them because they provided jobs for others. Now people and our president curse them.
I have been a loyal customer of Dell for many years. But, I have noticed a BIG drop in service, support, and quality. I am sure the economy is partly to blame; but, I will not continue with Dell if they don't realize that they are hurting their loyal customers and their reputation. Dell should return to the level of professional quality that they had before they became to big for the average consumer. Thumbs down Dell...
Cramer was saying just a couple of weeks ago, after the first 500 point meltdown, before the 600 point downgrade meltdown, that he would be a buyer at these levels. Now, it's not looking so good.
Nice to see that Cramer is finally coming around to a viewpoint that many of us have held for quite some time.
Whats worse than finding a worm in an apple you are eating, finding half a worm.
Jim, I wish you would shave so I could see what you look like, or---, are you trying to tell us something?
Dell's growth is slowing because they lost there way . the only thing Dell predicts is
their own failure... not the economy's
Cramer is not the sharpest knife in the drawer for just making his assumption after this one company. Dell is not a good indicator because they have not made a good product in over 10 years. People are starting to figure this out and they are switching to Apple and other companies that are putting out a better product. (HP, Toshiba, etc.) This decline in Dell will hopefully stay in place until they get their act together and decide to build a good computer again. Besides the Dell point Jim has been far too Bearish lately in his outlook. Maybe he will be happier with his stock picks next week.
When we off-shore jobs, we don't just send a Drawing to be manufactured. We send Engineers, Methods, Equipment, etc. Another words, we send away American innovations of many decades. Acer Computers is a great example. Dell and HP began having their Computers manufactured overseas, which handed this technology to the Asians. Now Acer is outselling HP and is quickly overtaking Dell as well. WE AIN'T GETTING THIS TECHNOLOGY, OR ANY OTHER BACK AMERICANS! Thank Republicans and the US Chamber of Commerce for ruining America...... It ain't the Dems or Independents that gave our Technology away people..... fact!
Dell has not made a great product in sometime, and in hard times the buyers become more discerning.
Hmmm are we having a recession soon or not. is growth maybe plus 2% for the next few qrts or could we see a coulple of minus 1 quarters in there. Its like watching an old man on a bad bike ride up hill What happens if he hits a speed bump will that make him stop, what happens if the soft tire really goes flat........
So how do we compete in a global economy
1. Education Education Education we still have to import folks for alot of high paying jobs since we have a shortage of scientists, engineers, doctors etc
2. build infrastructure in america not afghanistan, or anywhere else
3. develop a national energy policy we should be selling oil not importing it
4. get our debt under control about 4 trillion in debt reduction this decade is minimal. Remember the Obama/Boehner plan that would have about covered it
If we do these step we will have anice economy in a few years until then we are just a bunch of old men praying the leaky trie will not go flat
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