Market Shrugs Off CSCO Guidance, Prefers to Buy the Rip
The S&P closed up today despite earnings more disappointing than Congressman Christopher Lee's online dating skills
(because 1. If you're married, don't use your real fucking email
address and 2. everyone knows the easiest way to an internet girl's
heart is through a cock shot
and not some weird ass old man flexing pose, so really just
embarrassing for all) led by technology bellwether CSCO who got their
bells rung and let technology know that the weather is going to be
extremely shitty with a chance of declining margins, an increasing
budget deficit as the government stocks up on the rare o.b. tampons in preparation for the heavy period of economic malaise soon to be here, and the outcome of the Free Harry Baals movement coming to an inglorious end (and as a side note, Money McBags thinks the Femen Movement should 100% get behind Harry Baals).
In all, it was a news filled day in the market that in aggregate
rounded up to "who fucking cares" as investors ignored rising inflation,
shrinking margins, and sputtering jobs growth, by simply rolling up their foreskins and taking hits of hope and delusion. So as always, buy the dip, buy the rip, and if you can, buy the nip, because Bernanke would want it that way.
As for macro news, new claims for unemployment fell
to their lowest level in 2.5 years as bad weather knocked down the
phone lines and internet connections that people ordinarily use to file
new claims as well as apparently knocking down common fucking sense
(because, um, if the jobs report was negatively affected by the weather,
shouldn't new claims have you know, also been negatively affected by
the fucking weather? This is as confusing to Money McBags as M-theory
or why anilingus is spelled with an "i" and not an "a"). New claims
dropped 36k (or 32k if using the the number that was reported last week
instead of this week's made up higher number as the "hold the shock and
hope for no awe" strategy rears its ugly head) to 383k which was 27k
below analyst guesses and 35k below believability. The number dropping
below 400k can be taken as a good sign (that is if the number weren't
more bogus than John Travolta's marriage), though this can be taken as a better sign.
In other macro news, foreclosures fell,
or they didn't, depending on if you want to use a year over year
number (which was down 17%), a month over month number (which was up
1%), or a non "lenders were too fucking bogged down in fixing mortgage
fraud procedures to increase foreclosures" number (which would have been
up a cockriffic percent). James Saccacio, the CEO if RealtyTrac
commented "Unfortunately this is less a sign of a robust housing
recovery and more a sign that lenders have become bogged down in
reviewing procedures, resubmitting paperwork and formulating legal
arguments related to accusations of improper foreclosure processing." This would usually be concerning for the market but as all investors care about is the perception of the numbers and not what is behind those numbers (unless it is Brooklyn Decker who is behind them), the release was more irrelevant than James Garfield's presidency or Lacey Banghard's IQ.
Elsewhere wholesale inventories jumped 1%
while sales only rose .4% as businesses build up inventory right before
people can stop affording it with the coming stagflation (and of course
stagflation is coming not just because Bernanke is making sweet love to
the ponzeconomy™, but also because he showed it pictures of Olivia Wilde). The budget deficit grew to $50T
as spending picked up with the government busy buying the dip and
finally Federal Reserve Board Governor and noted QE2 critic (even though
he never had the Thomas Hoenig balls to dissent) Kevin Warsh is stepping down to do what all Americans aspire which is to live a happy life off of his wife's money.
Warsh was the youngest Fed Governor by decades and simply got tired
of the constant hazing of having to always erase the whiteboards, bring
the doughnuts, and be the one picked to play seven minutes in heaven
with Fed Governor Daniel Tarullo. Warsh is most famous for an op-ed he wrote for the WSJ
where he said the Fed’s Treasury buying “poses nontrivial risks” such
as unexpected movements in risk premiums across asset classes and
whatever is a bit worse than stagflation, perhaps "fucking stagflation.
The big news of the day though was earnings where CSCO reported their Q
and dropped ~13% after not connecting with investors who had them as
the backbone to their portfolios. The company warned that their margins
were under more pressure than Tom Cruise's colon in the Castro on a
Saturday night or Hosni Mubarak's presidency (who by the way is supposed to be stepping down tonight so the guy exactly fucking like him
can take over, so um, great fucking job guys, really. It's like Andrew
Johnson restoring rich white southern confederates to power immediately
after the civil war or Pam Anderson
getting back with Tommy Lee after he gave her hepatitis). Along with
declining margins, CSCO said they are also facing increasing competition
as customers in their core network switching business are switching to
products from HP and Juniper (and that line was so awful Jay Leno can
use it all he wants).
In other earnings news AKAM was down 15% after reporting a good Q
but giving revenue guidance for Q1 a wide margin below analyst guesses
as a result of more normal seasonality after last Q's post-recession big
jump in Q1 (and the margin was so wide that it immediately became the
most popular member of LargeandLovely.com). And CS missed profit expectations because of debt charges and regulations that keep them from manipulating their numbers as usual.
In positive earnings news, WFMI once again crushed guesses
and raised guidance because now that all food costs have skyrocketed,
people don't give a shit about paying the marginal dollar to eat food
that has fewer chemicals in it than Charlie Sheen's stool. Also EBAY was up ~7% after
they said that they expect PayPal revenue to double by 2013 as
wireless iPads making memberships to the Bangbus more prevalent during
bathroom breaks in the office.
Finally, corn reserves are at 15 year low, thus potentially figuratively cornholing part of the country's food supply, NYSE is in merger talks
with Deutsche Borse, Harrah's, and Las Vegas Sands where they promise
to share the VIG with whomever they merge, and WFC's CFO is walking away
with a $27MM retirement package
which is but a small pittance for nearly ruining the global economy.
Noted analyst Dick Bove (and he is noted for consistently being wrong)
said "It is not normal for a CFO to leave a company for personal reasons when major disclosures about to be made," but then again, it is not normal for a man named Richard to insist on calling himself Dick, so potato-puhtato.
As always, if you need more market analysis, dick jokes, and Sara Underwood in your lives (and really who among us doesn't?), Money McBags drops some small cap analysis today on the award winning When Genius Prevailed where he breaks down RICK's Q of which he is not only a shareholder (up 30% in 2 months), but also a client.