5/18/2012 2:03 PM

Facebook, Facebook, and Facebook
Market Commentary
By Charles Payne, CEO & Principal Analyst

This Facebook (FB) IPO has been a disaster thus far and not the savior many hoped for. Interesting that the broad market never caught Facebook fever as the market has sold off for almost two straight weeks. Instead it was the media that jumped on this bandwagon and maybe it could still (partly) live up to the hype. No matter how the stock finishes the session it has to be pointed out that for all the grief Wall Street takes, the boys in Silicon Valley are no different except they get to play it both ways. They have the same insatiable greed as Wall Street but wearing hoodies and sneakers gives them that ordinary people look and reputation.

But while they talk about helping society and doing no harm the techies want every last crumb on the table. Take this Facebook deal and consider if they really did only care about how to help society then they would have priced at $30 and acknowledged they could get more but wanted average people to get it at a reasonable price once it opened to the public. The stock would have "popped" and there might have been an infectious enthusiasm that spread beyond the stock market. I have no problem with being greedy as long as you own it. I do have a problem with greedy and phony and all the free passes that come with selective outrage.

Steve Jobs was a pure capitalist, Bill Gates is a pure capitalist and Mark Zuckerberg is a pure capitalist. I wish they would wear it with pride like an overpriced hooded sweater.

The market is oversold and there could be big news over the weekend as Germany may yield a little on the degree of austerity. Get ready to make money.

The Spot Light Goes to Facebook
By Carlos Guillen

Equity markets appear to be going nowhere fast so far during today's trading session, with little in terms of hard macroeconomic data and with lots of speculation about the true worth of Facebook's stock. Today the spotlight was taken away from Europe and put on Facebook, as its first day of trading began. However, it is apparent that the spotlight only lasted a couple of minutes as the stock quickly shied away from its $45.00 peak price reached in the first minute of trading. Now that the euphoria about Facebook has diminished, it is back to Europe.

The situation in Greece only continues to intensify, and the belief that the nation will have to leave the euro zone ramps higher and higher. Yesterday, Greece's credit rating was downgraded one level to CCC from B- by Fitch Ratings on concerns the country will not be able to gain the political support needed to sustain its membership in the euro area. It is apparent that now major institutions are increasingly worrying that the failure to form a government that would abide by the bailout terms would mean an abandonment of the euro currency.
While it is difficult to gauge the repercussions of a Greek exit, some nations are more vulnerable to than others, in particular Spain. In fact, yesterday Moody's Investor Service downgrade 16 Spanish banks as the nation's economy continues to weaken and as the government's capacity to provide support for troubled lenders diminishes.

This weekend leaders of eight of the world's biggest economies will meet to discuss strategies to keep the debt situation in Europe from scaling out of control, putting the rest of the world under economic pressure. At the moment Greek civilians have been closing out savings accounts in large numbers; however, it is still not considered a bank run. The fear at the moment is that if there is a bank run in Greece this will also spread to other weak euro nations such as Spain and Portugal.

Footwear Stomps Expectations
By David Urani

Let's forget about social networking for a minute and talk about something else. Shoes. Lace up, because we got a three-bagger of blowout earnings today from Foot Locker (FL), Brown Shoe (BWS), and Shoe Carnival (SCVL).

Foot Locker kicked Street EPS expectations by $0.09 while also reporting an 8.7% increase in revenue year over year, along with a 1.1% decrease in inventory that foreshadowed a 130 bps increase in gross margin. It's up more than 10% today.

Brown Shoe wasn't quite as impressive, posting just a 1.1% increase in sales (same-store up 2.5%) along with markdowns that dented gross margin. However, like Foot Locker, it noted a strong growth in running shoes, along with sandals. In either case, the results stomped consensus estimates, with EPS coming in $0.14 above expectations. It's up more than 18% today.

Shoe Carnival beat by $0.03 on the bottom line, driven by a 12.2% increase in revenue year over year. Once again, similar to what the other two companies said, athletic and spring footwear drove sales. It's up more than 8% today.

For both Foot Locker and Shoe Carnival, these were the highest quarterly earnings in their history. Meanwhile, all three stocks look like they could shake off all the European drama of this month and retake their year-to-date highs.

Considering the emphasis on athleticwear, maybe it's no surprise that Finish Line (FINL) is piggybacking the rally (up more than 6%). Nike (NKE) is also seeing a decent bid, up almost 3% with high volume. Also keep an eye on athletics-oriented Under Armour (UA) and Lululemon (LULU) as sleepers today.

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