A few late-breaking developments worth noting:
Shares of Home Depot just broke below their January spike low. If you’re a technically inclined type, you might remark
that there doesn’t appear to be much in the way of support until the bear market low (around $20 way back in January
2003).
Meanwhile, Fortune Brands just warned about the deteriorating earnings outlook. The company makes everything from
Titleist golf balls to Jim Beam bourbon to Moen faucets. I’ve included an excerpt from the company’s release, with my emphasis of certain comments
in bold. What jumps right out at you is the striking admission that business deteriorated throughout the quarter, with
April good, May worse, and June worse still …
“The environment has become more challenging for our brands and the second quarter is shaping up to be more difficult
than we had anticipated,” said Fortune Brands president and chief executive officer Bruce Carbonari. “April was a solid
month that tracked with our expectations, followed by softer-than-anticipated results in May. We’ve seen continued
softness in June and it’s now clear that we will not make up the May shortfall.
“With the rapid spike in gasoline prices and the decline in consumer confidence, we’re seeing American consumers pull
back. At the same time, the correction in the U.S. housing
market has intensified. Together, this means that home improvement purchases and homebuilding remain soft, that
many golfers are deferring ‘big ticket’ purchases of golf clubs, and that trading up to premium spirits brands
continues in the U.S. but at a more moderate pace,” Carbonari continued. “Meanwhile, higher costs for commodities such
as petroleum-based materials, glass and steel are adding to the pressures facing manufacturers.”
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