The government reported today that the economy shrank by 6.3% in the fourth quarter which was slightly below the earlier forecast of a decline of 6.2%. The major factor for the revision is that businesses had cut their inventories faster than originally believed.
The government also reported that the number of people filing first-time jobless claims rose to a record 652,000. That’s the ninth straight week jobless claims have set a record.
Despite the bleak economic reports, the market is up this morning thanks to good earnings news from Best Buy (BBY) and ConAgra (CAG). Best Buy actually posted an earnings decline of 28% but gave an upbeat forecast. I rate the stock a Buy.
ConAgra’s earnings dropped by 37%. The company said it’s going to cut bank on its capital spending. I still want to see more evidence of a turnaround. I rate CAG a Sell.