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7/25/2012 8:53 AM
If Apple Can't Shine...Maybe that's what they mean when they talk about sharing... not just the earnings of those that have struggled to succeed but the misery that comes with so many roadblocks from the top. Be that as it may, the market looks a lot better this morning perhaps because the economy is so ugly; it's only a matter of time before the Fed steps in.
By Charles Payne, CEO & Principal Analyst
Three bruising days in a row and Apple lays an egg after the bell. For a while, it looked like many Americans, and certainly the media which are hard at work for a second term for Obama, were happy promoting the idea of Schandenfreude. The narrative is that somehow America is the prettiest horse in the glue factory while shaking our heads at the dismal state of Europe. It's really amazing because many of these commentators point to Europe as doing the right thing when they want to promote even greater social welfare of the income equality. Let's face it, that would only be maybe Norway as a model while the Europe that's failing would be the laundry list we have all come to know all too well:
Not far from the list is France which will catch the others sooner rather than later with its ridiculous notion of a 75% tax on income above €1.0 million.
But can we take any comfort in the misfortunes of those old welfare nations in Europe that tried to hold onto political stability and former glory through high taxes and uncompetitive rules? Can we take pleasure when the nation isn't living up to a fraction of its potential or its own former glory? Can we take pleasure when the Dow is off 100 points for three sessions in a row? Can we gloat even as President Obama berates a shining example of American exceptionalism for not understanding how to create jobs or success? There is no gloating these days, even for those that would like to suggest we have the right game plan simply because we aren't Spain.
There is a plan to make us into Spain. To hike taxes on regular people under the despicable guise of a Buffett Tax or Millionaires Tax so we can build stuff we don't need and create more entitlement programs we can't fund. As for the idea that we don't have an economy where everybody has a shot to succeed, I would like President Obama to be more specific. I don't disagree that there are a lot of isms out there but the biggest problem, by far, for those that are not successful is a sense of entitlement and lure of not having to do the right thing(s). You can't take homeruns off the board from the guys that work hard and give them to people that do not work hard.
In the meantime, our economy continues to struggle which means it's harder for everyone to succeed.
A Caterpillar to the Rescue
What could help that along would be comments from Caterpillar (CAT) which gave props to other central banks for reviving economies in critical markets.
Moreover, the Caterpillar CEO is perhaps now the most important with respect to articulating the importance of global markets to American employment and opportunities. The company posted results that underscore why we must allow these multinational corporations room to grow and even dominate global growth. I think those nations that have been galloping and nipping at America's heels are only hitting speed bumps - don't bet against them.
Caterpillar posted its best quarter - ever! And management raised its full year guidance. Yes, the market has been punishing this stock on each news item to the point where its share price is nowhere near correct (see sidebar).
All-time record sales and revenue $17.37 billion + 22% year to year
All-time record earnings of $2.54 per share (street was at $2.28) +67% year to year
Brazil- improving because of lower monetary policy in late 2011
China - expected to take more aggressive monetary easing
USA- transportation bill helps
Europe- will take some time to turn around
Non-USA job growth 6,347
USA job growth 6,020
Boeing (BA), the country's largest exporter, also posted impressive earnings and lifted its full-year outlook, too.
Blue chip stocks should open strong while tech takes a hit, due in large part to Apple, so there will be a tug of war. I'm not forcing the issue this morning. We have a lot of positions that are down but in my mind super, super cheap. The problem is the sell first and head for the hills mentality of the market. Let's see who's winning the tug o war by the afternoon update.
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