Thursday trade: Rally pauses, #DumpKelloggs petition hits fan
WASHINGTON, December 1, 2016 – We’re gradually returning to normal life after taking an extended—and welcome—Thanksgiving break. Somewhat surprisingly, we’re seeing that Wall Street trading action Thursday looks pretty much the same as it did last week, indicating, perhaps, that stocks are still taking a break. That would actually make a lot of sense, given the almost frantic market bullishness that initially greeted Donald Trump’s “unexpected” win in this year’s presidential sweepstakes.
We’ve already dubbed bullish move the “Trump-Santa Claus Rally” of 2016, and, despite today’s schizoid market action, this rally seems to be remaining on track. At the 1:30 p.m. mark Thursday, the Dow continues to steam ahead, up some 50.5 points or roughly +0.25 percent. But the broader-based S&P 500 is off 7.4 points as we write this, down 0.34 percent, and the tech-heavy NASDAQ is getting slaughtered, off 68.44 points at the moment for a nasty 1.28 percent early afternoon loss.
The guilty party in the tech massacre seems once again to be 2016’s designated tech victim, Apple (symbol: AAPL). That company’s stock, already weak or meandering over several days’ trading action, is currently off around a point or so to stand at $109 per share and change. News (or gossip) today, allegedly out of Taiwan, says the iPhone maker has cut back on orders for its latest model, the iPhone 7, apparently indicating that the initial order rush for that model has subsided.
As it was in the 1990s, it’s become fashionable once again for Wall Street analysts and pundits to trash Apple, probably due to habit. Even though the company’s growth rate has reached a temporary plateau, it’s not like they’re going out of business. Earnings and profits will continue to outrace most tech companies, many of whom actually make no money at all. But when the HFT lemmings (and shorts) decide to head for the exits en mass, there’s not much stockholders (like the Maven) can do until this “trading sentiment” nonsense runs its course.
Oils are surging again today, with WTI up well over $50 bbl. and perhaps headed a bit higher, near term, part of the reason why Wall Street’s really big oil stocks are partying hearty today along with many exploration and fracking companies that had only recently been written off as DOA.
On other fronts, large-cap cereal and food purveyor Kellogg Company (K) proudly joined the growing post-election roster of virtue-signaling corporate morons earlier this week, declaring the company would no longer permit its advertisements to be run on the popular conservative news website Breitbart.com. Breitbart, not known for its temperate approach to such obvious provocations, quickly retaliated:
“Kellogg Co. announced on Tuesday its decision to pull ads from conservative media giant Breitbart.com because its 45,000,000 monthly conservative readers are not ‘aligned with our values as a company.’ In response, Breitbart News, one of the world’s top news publishers, has launched a #DumpKelloggs petition and called for a boycott of the ubiquitous food manufacturer.
“The decision by Kellogg’s, which makes Pringles, Eggo waffles, as well as Special K and Frosted Flakes cereals, among others, will make virtually no revenue impact on Breitbart.com. It does, however, represent an escalation in the war by leftist companies like Target and Allstate against conservative customers whose values propelled Donald Trump into the White House.
“’We regularly work with our media-buying partners to ensure our ads do not appear on sites that aren’t aligned with our values as a company,’ said Kellogg’s flack Chris Charles. ‘We recently reviewed the list of sites where our ads can be placed and decided to discontinue advertising on Breitbart.com. We are working to remove ads from that site.’
“Kellogg’s offered no examples of how Breitbart’s 45 million monthly readers fail to align with the breakfast maker’s values. Indeed, the move appears to be one more example of an out-of-touch corporation embracing false left-wing narratives used to cynically smear the hard working Americans that populate this nation’s heartland.”
Re: paragraph #1 in the above excerpt: “not aligned with our values as a company.” Seriously? Conservatives (including those at Breitbart) don’t eat breakfast cereal?
To Breitbart’s short list of showboating corporate grandstanders, we should add Matt Maloney, the (now former) CEO of Grubhub (GRUB), Inda Nooyi, CEO of PepsiCo (PEP), and many others. That includes Apple, which dumped the Breitbart app from its App Store before apparently adding it back in (although we’ve been unable to find it as of this writing.)
We’ve contended for years that corporate CEOs and PR departments have absolutely no business involving their companies in partisan left-wing political hackery. Given that the U.S. remains pretty much evenly divided between left and right wing ideologies, this kind of virtue-signaling grandstanding, particularly from a giant beverage and snack corporation like PepsiCo, risks alienating roughly 50 percent of a company’s customers. Simply stated, it’s bad business.
Back in the day, the then-youthful Maven was continually astonished when he came across news stories in which black customers were refused service at all-white lunch counters in the Deep South. The Maven figured—perhaps somewhat simplistically at the time—that whatever a customer’s color, his dollars were still green. So why turn away a paying customer for such an arbitrary reason.
Of course, things were a lot more socially complicated than that in the 1950s and 1960s. But money is still money, and corporate profits are still corporate profits, and corporate jobs are still corporate jobs. So why risk it all by doing something stupid by telling a certain percentage of your potential customers they should go suck eggs.
Yet like those idiots behind those Southern lunch counters of long ago, moronic companies like Kellogg’s—and many others—continue to preen themselves publically, virtue-signaling to the media and to the sanctimonious left that they, too, are just like the sanctimonious left.
Problem is, from the time the Maven pilloried Carbonite (CARB) for anti-Rush Limbaugh virtue-signaling many years ago, most companies that publicly pander to the left end up losing sales and watching their stock prices crater.
True to form, GRUB shares lost some 10 percent of their value the day after Maloney’s stupid announcement, leading to his sacking by upper management. Kellogg’s stock has already lost 5 percent of its value since its stupid political grandstanding, and is off over 1 percent just today. Other lefty virtue-signaling corporations at experiencing the same or similar results—including Apple, unsurprisingly, whose lefty-loving CEO Tim Cook has never missed a chance to diss even moderate politicians if they intrude on his own lefty-ideology, something he shares, alas, with most pampered Silicon Valley CEOs.
The Maven will write a more specific column on this ongoing executive suite ideological madness in the near-term. But in the meantime, if you happen to find Tony the Tiger’s public sneering at half his U.S. customers disgusting, we’re sure Post Holdings (POST) has plenty of swell, competing breakfast products they’d love to sell you.
In the meantime, perhaps Kellogg’s frosted flaks will content themselves with advertising on more clearly nonpartisan, ideology-free channels and sites like CNN and MSNBC.