저자: JimCramer · 외국인
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4월 S&P Global 미국 복합 PMI가 예상보다 크게 약화되며 'brown shoots'(둔화 신호)가 확인됐다고 주장. 서비스업 고용 감소는 2009년 이후 최대, 물가 상승률은 완화. 이 둔화가 연준의 금리 인하 명분이 되므로 금리 인하 기대에 긍정적이라는 취지. 금리는 2월 고용지표 이후 50bp 이상 올라 차입 비용을 높였고, 기술주만 구조적 성장으로 예외. 일부 기업 실적 부진(JB Hunt, Snap-on, RH, Cleveland-Cliffs 등)과 외식 체인 파산 우려도 언급.
다듬은 글
Jim Cramer takes a look at today's PMI report and what it means for the economy
Brown shoots everywhere, and that's a good thing. Remember, we would be looking for a slowdown that would justify the Fed's position that we don't need any more rate hikes. When we get brown shoots, the opposite of green shoots, Wall Street laps it up, because it means the Fed might win the fight against inflation. That's why the Dow gained 264 points today, the S&P jumped 1.2%, and the NASDAQ rose 1.59%. That was easy.
It's been hard to parse this economy. When we got the February employment numbers, they were so steamy and hot that it felt like the Fed was blindsided, because they'd been talking about multiple rate cuts this year, and you don't do that when the job market's booming. Anything that makes the Fed look stupid hurts its ability to maintain price stability. So was the Fed really wrong? Just when Wall Street gave up on the possibility of rate cuts anytime soon, the Fed joined them. Now we're starting to get actual signs of a weaker economy, and it makes sense. Interest rates have soared, and they're doing their job. Since that smoking-hot February labor report, which was followed by another hot set of numbers for March, the benchmark U.S. 10-year yield has gone up by more than 50 basis points. That makes it more expensive to borrow money, which tends to slow down most of the economy, except for parts of tech that have what we would call secular growth, which aren't bound by little Fed rate hikes or cuts, for that matter.
Yep, when we have weakness, what do we do? We buy the Magnificent Seven and friends, and that's exactly what we saw today.
So how do you know if there really is a slowdown? It's not easy, but we've had some very big tells of late. J.B. Hunt, the fourth-largest trucking company, had a solid January and an even stronger February, but business shrank in March, and total operating revenue dropped 9%. J.B. Hunt seemed almost mortified that it performed so badly. Prologis, the world's leading owner of logistics real estate like warehouses, was a lot less apologetic, even though it lowered its guidance dramatically just a month after coming on the show. In that interview, we heard a much more bullish story, and we were told there was only weakness in Southern California. A month later, the weakness is in Seattle, New Jersey, and Savannah, Georgia. Why these markets? Seattle is maybe where Amazon is, I don't know. New Jersey's warehouse space serves the whole New York area. Savannah was supposed to be the toughest, best region. Put it all together, and vacancy rates for these warehouses are going higher, because even e-commerce isn't safe. That is a big deal.
Then we heard a slowdown story from CarMax, the used car dealer. They blamed the economy and cut prices of used vehicles, but they still got hurt by financing charges. That's the bond market taking care of business. Remember, the bond market controls long rates, and bond yields are now up hugely, which makes auto loans a lot more expensive, so fewer people buy cars.
Snap-on helps small business owners with fresh new tools, and it got whacked with some really weak numbers. That's a genuine surprise from what's usually a very reliable company selling to decently capitalized mom-and-pop companies. We also had weak numbers from RH, formerly Restoration Hardware. The retailer talked about a big game, really big, about how things were going to get better. I think one day they will, but higher rates and a lack of new homes for sale have hurt the business and the stock has been clocked. Hey, you know what? Today was Sherwin-Williams' turn. The paint maker said there was demand choppiness, something that took a lot of people by surprise, because anything home-related had been quite strong, so the stock got clobbered.
Then there's Nucor, the fabulous steelmaker, which saw some of its grades go down in price. That's the first time I've seen that in a while. It missed its quarter. Sure, volumes were up quarter over quarter, but the price declines were stark, signaling maybe broad weakness in construction and heavy machinery. We're going to talk to the CEO later, but a miss here is a miss, even though there were many good things about it. Cleveland-Cliffs had a miss too, and there's a steel company, Olympic Steel, that's auto-related.
On top of that, we've had the collapse of Express, the formerly trendy mall-based apparel chain with 600 stores. It's agreed to close 95, and a group of investors led by Simon Property is buying the rest, if only so their malls don't have a lot of empty storefronts. We even got two restaurant chain bankruptcy filings. There's Tijuana Flats, a Southern 90-store Tex-Mex chain, along with the 40-store Oberweis Dairy in the Midwest. Red Lobster, with 650 locations, is also in financial trouble. That's disastrous, all-you-can-eat shrimp promotion for 20 bucks and they took a beating. Well, I mean, that's fair for them. They just hired a restructuring expert, probably contemplating bankruptcy. I don't know.
Of course, you can say this is all anecdotal. The brown shoots are really all one-off situations: real estate, small business, high-end furniture, paint, freight, steel, electric vehicles, restaurants. There's almost no pattern here, so it's easy to argue that the economy is still humming. But that's a pretty big mosaic. Except today we got something different. We got empirical brown shoots in the form of the S&P Global flash U.S. composite purchasing managers' index, an aggregate number, and it was so weak that I think it actually put a near-term Fed rate cut back on the table. Two-year Treasury yields fell sharply today in a two-year government auction, with people anticipating there could be a rate cut. I'm going to quote extensively from the report because it's so on point. Listen to this: "U.S. business activity continued to increase in April, but the rate of expansion slowed amid signs of weaker demand. The latest rise in output was the smallest in the year to date, reflecting reduced rates of growth in falling orders in both manufacturing and services." Wow, that's a forest of brown shoots. But could we now be seeing stagflation, where business slows down but prices keep climbing? No, listen to this bit of positive news: "Rates of inflation generally eased at the start of the second quarter, with both input cost and output prices rising less quickly, as the composite..." That's exactly what we wanted to see if we're going to get a Fed rate cut.
This PMI report also showed, for the first time, a reluctance in hiring. Get this: "A number of survey respondents indicated that they had held off on backfilling positions following the departure of staff. As a result, employment decreased for the first time since June 2020." Look, we never want to be cheering for job losses, but if you want to beat inflation, you need the pace of hiring to slow.
We saw job cuts tonight at Tesla. The company had a declining number for earnings per share, but it was still better than expected. That's in keeping with the brown shoots I'm talking about. There was no brown shoot from Nvidia, though, because there's a slide in the Tesla deck that shows a massive increase in the number of Nvidia chips used, presumably for their cars.
I have been worried about services being too hot. Okay, it's obviously a problem, because most of the weakness I've seen came down to manufacturing. But the PMI report says: "The overall reduction in workforce numbers was led by services, where employment decreased solidly to the largest extent since mid-2020." Get this: the report goes on to say, "Excluding the opening wave of the COVID-19 pandemic, the decline in services staffing levels in April was the most pronounced since the end of 2009." Holy cow, that's the Great Recession. You know, they really hammer this point home: "The more challenging business environment prompted companies to cut payroll numbers at a rate not seen since the global financial crisis." Wow, real bad news for the economy. But remember, we need bad news for the economy, because that's what cools off inflation, something also noted in this PMI report. That's what brings us rate cuts.
So let's think this through. We have a host of companies that we know are doing well: GE Aerospace, American Express, General Motors, SAP, and Texas Instruments tonight. By the way, SAP is on later in the show, and you'll love it. Earnings have been spotty. Oh, Spotify was good too. We know there's no letup in travel or housing. PulteGroup put up some very strong numbers today, Pulte being a big homebuilder. But the bottom line: when you combine the anecdotal evidence with the empirical PMI report, you can see that right now, at this moment, the brown shoots are infecting the green. That's exactly what we need for the Fed to justify a cut in rates. Of course it happens just as everybody has given up on the possibility of a rate cut.
Ryan in Gig Harbor, Washington, you're on. Jim, do you still think there's more upside for Amazon? Yeah, absolutely, why not? Amazon is the great equalizer. I think Amazon Web Services is going to be incredibly strong, and, by the way, Amazon advertising is on fire.
Next, Jim in Georgia, go ahead. Hey, good afternoon, Jim. Glad to hear that. What are your thoughts about this acquisition between Kroger and Albertsons? I think the government's going to block it, because they're still reeling from the day they let the Safeway deal go through, the one where they gave all the stores to Haggen, and then it became a Haggen, which they actually called it. So they're not going to do that deal. I think they'll block that one anyway.
Right now, the brown shoots are indeed infecting the green shoots. Remember, we're in favor of brown shoots, because we want rate cuts. It's exactly what the Fed needs to justify cutting rates, just when everyone had given up. Well, isn't that exactly the way it works? Adobe... may have... Salesforce... ASP shot the lights out of the quarter, with the stock soaring in response, and I'm learning more about what's working for the software giant with the company. Top VP... nobody is interested about it except for me, but you ought to be, because it's really good.
On the other side of the coin, Nu is melting down after reporting last night, so our investors get a buying opportunity. The steelmaker that was this a warning for what's to come, I got the exclusive. And Mattel is trying to find its footing in this post-Barbie movie world, and I'm hearing how the company fared last quarter.
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