The action in shares of Deere (DE) support the idea that this is a total garbage rally, and that people are throwing money at crap of all kinds.
The agriculture equipment maker missed earnings guidance, and it lowered its outlook, and yet the stock is up about 2%. Typical.
There’s really not much mystery here. The world economy just sucks.
WSJ: he company now expects world-wide sales of its construction and forestry equipment to fall 42% this fiscal year. Sales of turf equipment and small utility tractors are seen falling 20%.
Deere projected industry-wide sales of farm equipment in South America — a key growth market for Deere — to fall 20% to 30%, compared with the company’s previous forecast for a decline of 15% to 25%. The company said order cancellations in the latest quarter where higher than usual.
“South America is a mess,” said Lawrence De Maria, an analyst for Sterne Agee & Leach Inc. “The hope is that the market stabilizes, but it’s not like there’s going to be a V-shaped recovery there.”
Yes, but Bank of America raised $13.5 billion this week, so keep on buying!