Lowe’s (NYSE:LOW) reported weak earnings yesterday. Plus, the company’s guidance for current quarter earnings was weaker than expected. Needless to say, worrisome headlines about consumer spending sprang up, and stock prices went down.
At Daily Profit, we’ve been discussing how high unemployment necessarily means that consumer spending will be weak. And that with little chance of any improvement in unemployment in the foreseeable future, there’s not likely to be more money spent. This is a major condition of my "Managed America" economic scenario.
Too bad Lowe’s CEO Robert A. Niblock isn’t a reader. He said "Wavering consumer confidence, unseasonable weather in core markets, and restrained customer spending compared to last year’s fiscal stimulus-aided results led to lower than expected sales in the second quarter…"
Yeah. It’s the weather. That’s it.
And Lowe’s COO Larry Stone ran with it, saying that the mild summer has led to declines in air conditioner sales. But Stone said the heat wave in August has air conditioners selling at a "…pretty good clip."
Apparently better air conditioner sales couldn’t keep Lowe’s from lowering future guidance and scaling back its expansion plans.
*****The Fed is phasing out several economic rescue programs. Treasury bond purchases and a money market lending program will expire, while a program for loans to commercial banks is being scaled back.
One program that isn’t in danger of getting cancelled is the Term Asset-Backed Securities Loan Facility, or TALF. That’s because TALF was expanded to allow commercial real estate assets to qualify under the program. And with $165 billion in commercial real estate loans due this year, and values down 35%, TALF could come in handy.
Again, despite the fact that it’s essentially taxpayers at risk, this is a good thing for the economy. And we expected the Fed would do something to help commercial real estate.
*****Jason Cimpl, the technical analyst for TradeMaster Daily Stock Alerts
just nailed down another winner. This time, his readers were treated to a 29% gain on PPG Industries (NYSE:PPG) in just under two months.
Never heard of PPG Industries? Well, me neither, until Jason uncovered an extremely bullish trading pattern on the stock chart and recommended it to his readers. Jason is extremely skilled at finding profitable trading patterns on stocks, both well-known and unknown.
Now, Jason has his readers positioned to profit from a downward move in financials stocks. For more, click HERE.
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We received hundreds of submissions from our readers around the world. And 470 of your fellow readers voted for their favorite t-shirt slogan. The winning t-shirt slogan received 41% of the audience’s vote. And the slogan is…"Don’t sweat the big stuff. Trade the small stuff. The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks."
The slogan was submitted by Monika Schmidt. Monika will receive a one-year membership to all of my advisory services, a $2,680 value. Plus, she’ll get a personalized, autographed copy of my The Small-Cap Investor and three t-shirts with her winning slogan. Congrats Monika, and thanks for contributing a great slogan to our contest! We hope you enjoy your complimentary membership to our investing newsletter services, including SmallCapInvestor.com PRO.
Monika’s winning idea was one of many great submissions we received from our audience. The runners up were as follows:
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Everyone who submitted their slogan has received a complimentary one-month subscription to SmallCapInvestor.com PRO. If for some reason you haven’t already heard from Claire in my office, please call her at 202-420-7800 and she can setup your complimentary one-month membership. I hope you enjoy your trial, and consider purchasing a copy of The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks. You can pre-purchase your copies today by clicking here now.
Thanks again for your support and interest. Once the t-shirts are available, I’ll share the design with you.