Trader Talk

Thank You Steve Jobs

Thank you, Steve Jobs! You changed my life and millions of others.

Eight years ago, fed up with the WinTel hardware/software monopoly and the endless bugs and viruses, I bought my first Apple computer: a PowerMac G5 (with an 80 GB hard drive!).

I also bought a second generation, 20 gigabyte iPod and was one of the early signers for iTunes, which began in the middle of 2003. In a nearly year-long process, I ripped my entire CD collection — nearly 25,000 songs — into the PowerMac, and discovered that I could be my own DJ.

I stopped playing CDs, though I did occasionally pull LPs off the shelf.

A year of so later, I bought a PowerBook G4 laptop, then in 2008 retired the PowerMac and bought a Mac Pro, then retired the PowerBook and bought a MacBook Pro.

I also bought the iPhone in late 2007, then the iPad — one for me, one for my wife, and one for my brother. Like all Apple fans, I loved the cool design and interface, but most of all I loved Apple because the products work: the hardware and the software is integrated.

Thank you, thank you, Steve Jobs.?


1. Global markets are again up; much of the rally seems to be based on hopes that some kind of deal will be forthcoming on European bank recapitalization.

2. The European Central Bank left rates unchaged at 1.5 percent. It was Jean-Claude Trichet's last meeting; it will be a little awkward for the incoming president, Mario Draghi, to cut interest rates with euro inflation at 3 percent, but he may have to. The ECB is resuming buying covered bonds.

3. Belgian-French bank Dexia dropped sharply this morning, as there are indications the Belgian government may nationalize part of the bank. There are reports that the Luxembourg part of the bank may be sold to international investors, so it looks like the company is being broken up. The Belgian government must think they can hold the assets and sell later at a higher price. Ball is now in the French government's court. The board of directors is meeting Saturday.

4. What's up with retail? September same store sales were solid — better than expected. I didn't say "great," I said "solid." Thanks to heavy discounting, there has been solid back to school sales...same-store sales were up 5.8 percent, above the RetailMetrics estimate of up 4.9 percent. There seems to be a disconnect between other economic data and retail sales. Nordstrom up 10.7 percent, Saks up 9.3 percent, Limited Brands up 11 percent, but even the lower end did well. Two companies that have not been knocking the cover off the ball also did well: Target up 5.3 percent, and Kohl's up 4.1 percent.

Not a lot of commentary, unfortunately, but there seldom is. JC Penney and TJX guided lower, but Ross Stores guided higher.

But will better sales translate to strong earnings in the quarter? That’s not too clear yet, as most retailers failed to provide any earnings guidance. The couple that did report underwhelmed the Street.

Still, a strong August, a solid September...this bodes reasonably well for Christmas sales.

5. Another winner: Macy’s which posted a stronger-than-expected 4.9 percent rise in September same-store sales. It also sees third-quarter same-store sales at the high end of its prior range, and reaffirmed its fourth-quarter same-store sales estimate of up 4 percent to 4.5 percent.

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