Tuesday, April 13, 2010

Intel (INTC) Creams Estimates

While Intel (INTC) will get all the attention tonight I'll be reading through the CSX (CSX) data (they also beat by 9 cents) for a better idea of what is going on in the economy.  (I don't care if they beat or miss analysts guestimates - simply what they have to say about what they are seeing in their business)  As for Intel a "surprise" beat of 5 cents on the bottom line with a much better than expected revenue figure (+$500M) as well.  This should send the Fast Money guys into an orgy of giddiness from 5 PM to 6 PM..... and futures should be jumping as I type.

  • Intel (INTC) on Tuesday reported a first-quarter profit of $2.4 billion, or 43 cents a share, compared with a profit of $629 million, or 11 cents a share, for the year-earlier period. Revenue was $10.3 billion, up from $7.1 billion in the same quarter the previous year. Analysts had expected the Santa Clara, Calif.-based Intel to report earnings of 38 cents a share, on revenue of $9.8 billion, according to a consensus survey by Thomson Reuters  
This will be the last quarter where year over year comparisons are going to be *this* easy to beat since Q1 2009 was the depth of the recession.  (i.e. a behemoth like Intel normally doesn't grow revenue 44% year over year!)  While every company is reporting results versus year ago period (as is the status quo), what is more interesting is looking at how these companies did versus the same period 2 years ago when a more normal economy was prevalent. 

That said once more selling (almost) anything is a mistake, and my index exposure - only gone for a few hours - already makes me feel empty.   Thankfully, I have not shorted the index in ages as the "6 day moving average" rule continues to tell us shorting is evil and unpatriotic.  Since the market no longer corrects, the first 2 days of this week will be considered a "sell off" (the market was only up 0.2% Monday and flat today, i.e. "2 days of selling") - hence the rally is now ready to resume after that pullback! ;)

Since we are overweight in technology I hope this helps to bust some of our stocks out tomorrow - the party has been mostly in banks, insurance, consumer discretionary and industrials of late.  I continue to plan to liquidate into this unrelenting rally as we are going to soon be entering territory rarely seen in terms of winning streaks.  If the market rallies straight for 4-6 more weeks I can see myself going to 90%+ cash, since we'd surely be at some unheard of standard deviation above the norm.

Until good news is sold (i.e. 2 months of rallying has priced in the data)... the market remains unshortable.  Party on Garth.


EDIT 4:40 PM - some data on the economy from CSX below; the irony in the statement below is that consumer related stocks and coal are 2 of the superstars of the stock market.  In the end electricity consumption is one of the best barometers of economic health, so the fact that the US continues to not need a lot of natural gas and coal makes this 'recovery' thesis hard to get behind.   But that's the real economy - the important thing for us is the stock market economy which is in a place of nirvana: (a) labor costs pared to the bone (b) government handing out money like there is no tomorrow to its consumers to spend (c) the new house ATM born (d) Ben Bernanke backstopping any carbon based entity on Earth.  A potent combo.

  • While most shipments rose, the company said coal and consumer-related shipments continued to be weak. A drop-off in building products and other shipments related to the housing market persisted. Coal shipments declined as consumers and businesses used less electricity.


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