Thursday, April 30, 2009
Posted by Roberto
11:27 AM
0 comments
WALL STREET LOOKS FORWARD, NOT BACK
Wall Street sees signs of an economic recovery, so it is abandoning so-called safety stocks like Bristol-Myers for early-cycle plays like Fortune Brands. The focus is shifting from defense to growth because money managers expect a much better business environment six to nine months from now.
The only thing that matters is the performance going forward. That's why a consistent, stable firm like Bristol-Myers Squibb [BMY 19.15] can lose 4.3% in a single trading session, despite reporting solid numbers today. At the same time, Fortune Brands [FO 38.98] cut its dividend, but that stock finished the day higher by 3.9%.
Wheii.com Notes:
We still have to consider that consumer spending dipped in March as recession persists and jobless claims are stuck at elevated levels!
The number of people continuing to draw unemployment benefits jumped to more than 6.27 million, the highest on records dating back to 1967. Journalists shouldn't call the lower claims of 631000 last week (down from the prior week's 645000) a bullish signal!!! It is lower but we still have 631,000 NEW initial claims for unemployment!
Since early March, financials have risen 74 percent; cyclical consumer discretionary have jumped 46 percent; industrials gained 44 percent and materials are up 41 percent. The defensive sectors are underperforming. Almost half of the S&P are now up 50 percent from their 52-week lows.
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