I man handled a ton of conference calls today and none was more striking than the Nucor call. Dan DiMicco, a generally optimistic CEO, is about as negative as I have ever heard him. He said:
“These are the most challenging steel markets we have ever experienced. The severity of this downturn is unprecedented. This is an economic crisis unlike anything seen in our lifetime. We have yet to see any evidence that this severe decline in economic activity has reached a bottom. In fact, conditions have continued to worsen with each month this quarter. It is extremely ugly out there.”
On the trucking side, YRCW‘s CEO Bill Zollars had this to say this evening:
“Unfortunately, the economy progressively weakened throughout the quarter making it more challenging to get ahead of the volume declines.”
The YRCW call is tomorrow morning so I’ll update their status then. Let me stress this point: these are the companies that are at the heart of the downturn. The optimistic comments from Coach’s CEO and other industries are practically meaningless in my opinion. The steel and trucking industries are the industries in the trenches figthing the real battles in this economy. As the old saying goes, there are people that shower before work and people that shower after work. I prefer to use the ones that shower after work as a gauge for the economy. Besides, the ones that shower before work are too busy swindling more money from the taxpayers than to focus time on an economic recovery….
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
Sam
Intersting how the MSM never once mentioned NUE conference call disclosure, which I agree, and shared with my clients, was a huge vote of no confidence in the green shoots theory. CRE in collapse, autos about to be deep sixed. Can steel makers weather the other side of the pending hurricane? we shall see!
Bill
Awesome color, thanks TPC.
Eric
Good post this blog gets better everyday. Dont you think everyone is expecting the market to selloff on the stress tests on the 4th, being the contrarian it would make me think if we are going to pull back it would be next week and catch people off guard.