Good morning, investors, and welcome back to Breakfast with the Fool. The bagels are toasted and the coffee's hot. Pour yourself a cup of java and grab up a stool, and let's scan the morning papers together.
Blockbuster bullish, not bankrupt
Laughing in the face of bankruptcy fears, Blockbuster (NYSE: BBI ) now promises to begin renting and selling videos on TiVo-brand (Nasdaq: TIVO ) DVRs later this year.
Netflix (Nasdaq: NFLX ) may well reply "been there, done that" -- the DVDs-by-mail pioneer has a similar deal to stream movies through TiVo, as well as Microsoft (Nasdaq: MSFT ) Xboxes and other devices. Yet Blockbuster has something that Netflix doesn't -- the right to rent movies through TiVo before they've even been released on pay-per-view. (Will that be enough to trump Netflix's head start in the streaming arena? Place your bets here.)
Economy more durable than expected
Turning now from virtual, ether-borne entertainment to something a bit more substantial, early this morning the U.S. Department of Commerce reported that that orders for cars, airplanes, household appliances, furniture, and other U.S.-made "durable goods" increased 3.4% in February. Granted, "3.4" may not sound like a big number when most headlines these days are denominated in the trillions. But here's the good news: Wall Street expected a 1% to 2% decline in durable goods orders, which have been hurt especially by a precipitous decline in new plane orders from Boeing (NYSE: BA ) .
FedEx Fred feeling frisky?
Between the higher durable goods activity and a concurrent Commerce conclusion that industry inventories dropped 0.9% in February (implying a greater need to restock those inventories in the future), FedEx (NYSE: FDX ) Chairman Fred Smith is looking pretty prescient right now. Earlier this month, Smith observed, "Inventories are now being bled off and they will have to be restocked beginning later in the year," concluding: "We probably have hit the bottom." (Coincidentally, about six months ago, Home Depot (NYSE: HD ) CEO Frank Blake also predicted the recovery would be coming round the bend right about now.)
Before buying into the happy talk, however, take note: Even as February's numbers changed color from red to green this morning, Commerce revised its January numbers lower, escalating the previous estimate of a 4.5% January drop to 7.3%.
A more cynical Fool than I might wonder whether Commerce engaged in some "creative accounting" to shift production from January into February -- thus breaking a six-month string of "down" months for durables and "showing progress." But even investors totally devoid of cynicism should take note: Durable goods estimates are sequential in nature. They show how production is trending month-over-month, and so are subject to seasonal fluctuations. Compare apples to apples, however, and it's worth pointing out that February 2009's numbers are still down 28.4% from February 2008.
Foolish takeaway
Hang tight, Fools. We're not out of this mess yet.
How long will it be till reality begins to resemble Wednesday's good "news"? Your guess is as good as ours ... so post your thoughts below, and Fool on!
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