Surprise → Frustration → Hubris → It’s A Stock Picker’s Market Again You Guys
“Global financial markets made a series of epic moves in the second half of 2014: toward a sharply lower price of oil, much lower interest rates, and a far stronger dollar…[Yesterday was] a reminder that for every American enjoying a cheaper tank of gas or a more affordable mortgage, there are also major employers wrestling with less investment in new oil exploration and lower earnings from abroad.” Meanwhile, the Financial Times says look to balance sheets for clues on the future winners and losers of lower crude prices: “The key point, however, is that at the same time as the oil industry as a whole was adding debt, it was betting — through its choice of projects — on sustained high oil prices…In five years’ time, which companies will know that they got it right: those that saw $50 oil as a floor and assumed a return to $100? Or those who planned for $50 oil to last years, organised their finances accordingly, and so could treat anything more than that as an unexpected bonus?” Meanwhile, “the thing about currency wars is that somebody has to lose them” appears to be the general attitude these days. Josh Brown’s latest article further illustrates this attitude: “The no-vol, sleepy grind higher has been replaced with all sorts of drama. Confusing economic data points abound…the profits for just showing up (i.e. 2013) aren’t quite so automatic so far this year and the large-cap US stock rodeo seems to be coming unhinged.”
AAPL: The Staggering Numbers
Apple is trading higher today (up 6% at 8:15 am) after last night’s huge earnings beat: Earnings per share rose nearly 50%, exceeding expectations by 18%; revenue increased 30% to $75 billion, exceeding expectations by 10%.
But they’re good enough for Robert Shiller.
A lot of people are worried about Marxists in the cabinet, and their decision to “halt the sale of state assets” smells a bit like nationalization.