Tuesday, May 19, 2009

More on Lowe's

Yesterday Lowe's got alot credit for the market rally. If so many people didn't seem to believe it, it would actually be funny. Goldman upgrading Bank of America, sparking another jam job in light volume on no news the day before Bank of America raises 8 billion of capital (occurred today and was disclosed after the bell) is all the reason you needed.

If you look at Lowe's the picture is pretty bleak. Shows consumers are still tightening and wanting to embrace the long lost frugality of those who lived in the Great Depression. For example. Sales of seeds surged 20% while big ticket items over $500 posted a 14% decline yoy. The company lowered the top end of its revenue guidance but is cutting its way to greater profitability.

Yet somehow this news was supposed to have sparked a 3% rally yesterday. Good grief.
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2 comments:

Travis said...

What about LIBOR having its biggest drop in four months? Do you think that played into/is playing into the rally at all?

May 20, 2009 at 11:32 AM
Market Seer said...

Well I think it is more of a sympton than a cause. The cause is all the money the Fed just threw at the system. 6 to 9 months later you are seeing the affect. The libor fall is a symptom of this and verifies what we already know. There is alot of liqudity flowing around that caused the market to catch up.

May 20, 2009 at 2:32 PM

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