- One news story really jumped out at me. Sears raised their earnings guidance this morning. And they didn’t just boost it – they surpassed analyst expectations by a mile. They raised their low end for Q4 guidance a full 27% higher than analysts expect. They raised the high end of their guidance a full 53% higher than analysts expectations. They’re one of several retailers raising guidance recently, but this one jumped out at me. Sears is the bottom of the barrel in terms of the big name retailers. They represent the low-end consumer. I am extraordinarily familiar with their operations and the business debacle that Sears has been over the last few years after having been a vocal shareholder for several years. This news is nothing short of stunning. It not only shows that consumers are stronger than expected, but it shows that the analyst community is still very far behind the 8 ball in terms of gauging the economic strength.
- Claims continue their steady drip lower. Will the market continue its Chinese water torture on short sellers as it slowly but surely drifts higher?
- The jobs report is out tomorrow. What I am grappling with right now is the market response. If we get a huge upside surprise the market will rally and then sell-off as we did last month. The anticipation for rate hikes will grow. I actually think the best number we can get is something right in-line with expectations or marginally higher as JP Morgan expects. What do you think?
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.