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Bull/Bear Index Shows Huge Investor Confusion

You think you're clueless? Are stocks undervalued? Overbought? Who knows? The S&P 500 is up 7.2 percent this month, a great start, but volume is positively horrible (NYSE consolidated volume is 30 percent below the same period for September of last year) and because no one is particularly sure about the value of earnings estimates, no one is quite sure what to make of this.

Retail investors are thoroughly confused — just look at the weekly American Association of Individual Investors Bull/Bear Index: 50.9 percent of respondents are bullish, a 52-week high. But 3 weeks ago, only about 20 percent were bullish — a 52-week LOW. Huh?

No real reaction from S&P futures before Thursday's open as initial and continuing jobless claims were both a tad below expectations, headline PPI a bit stronger than expected.

Elsewhere:

1) FedEx reported Q1 earnings roughly in line with expectations ($1.20 vs. $1.21 expected). Q2 guidance was light of expectations: $1.15-1.35 vs. $1.36 consensus, but full year guidance was raised to $4.80-$5.25 (from $4.60-$5.20) vs. consensus of $5.22, excluding the cost of merging some ground operations. They are assuming "moderate growth in the global economy."

The key segment is Express, the No. 1 express transportation provider in the world, which is about 60 percent of sales. Revenues here were 20 percent above the same period last year on strong growth in the International Priority part of the business.

FedEx Ground (about 20 percent of sales) does package delivery in North America, revenues were up 13 percent. FedEx Freight (about 12 percent of sales) is a less than truckload (LTL) carrier, revenues were up 28 percent. FedEx Services (5 percent of sales) provides business services like copying, revenues were down 8 percent.

2) Pier 1 Imports is back to making money. The home decor company posted a Q2 profit for the fourth straight quarter. Pier 1 earned $14.4m that's 12 cents per share for Q2 versus a loss of 17 cents per share, a year earlier. Fewer clearance items, lower costs and lean inventory levels are credited for the good news.

3) Decoupling: maybe this time it's for real? Decoupling was dealt a blow by the debt crises of 2008, but Robert Horrocks, Morningstar's chief investment officer, has a fascinating piece out arguing that this Asia is "laying down its own economic track."

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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