On a day when the S&P is ripping almost 3% higher on the back of Intel’s results it’s curious to note that Yum Brands is slipping 4% on disappointing earnings. Intel saw phenomenal strength in Asia and sees continued strength going forward. But Yum Brands disappointed despite a massive move into Asia over the last few years. Meanwhile, earnings from Dell two days ago were largely ignored even though the PC maker sees no better than low single digit growth in the PC world in the coming 5 years.
All of this has to make you wonder if this isn’t just a case of the analysts being too bearish in one case and too bullish in another case? Is Intel seeing real strength or were the estimates simply slashed too far? Is Dell seeing real weakness or were the analysts overly optimistic? And is China seeing a continued rebound or were the analysts simply too optimistic about Yum’s earnings? More importantly, does the mixed results of these three firms justify a 5% move in the S&P 500? Thoughts and comments are appreciated.
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.