Michael Kors Soars, Abercrombie Ain't As Cool As You Think, and the Econ News You Should Know for Your Wall Street Week in Review

The four things you need to know on May 31.

May 31, 2014 at 7:00PM
There's no better way to kick off June than with some beach-side cervezas, a fresh new fluorescent bathing suit, and a two-minute rundown of what moved Wall Street to new records. The S&P 500 reached new all-time highs on a big, holiday-shortened four-day week.

1. Stock market winner of the week ...
We ourselves are not exactly trend-setters when it comes to fashion, but it doesn't take a Diane Von Furstenberg to figure out that Michael Kors (NYSE:KORS) is all over Madison Avenue and Wall Street. The designer of luxury handbags for women released its first quarter earnings last week, revealing a 54.6% rise in revenue from the same period last year, reaching a hot $917.5 million in quarterly revenue.

For those of you keeping score, the revenue figures over the first three months of 2014 are well over the $816 million analysts expected. And here's why: global demand. Mike has already cut the red tape to open over 100 stores worldwide in just the past few months. And that's to satisfy the 63% rise in European sales over the past year.

But what really got investors giddy were the company's good lookin' projections. Through the full year of fiscal 2015, Kors is projecting over 31% year-over-year revenue growth, which would take the company through its 33rd straight quarter of positive revenue gains. Now that's worth tossing a big gold label on.
2. ... And stock market loser
After reporting earnings last week, Abercrombie & Fitch (NYSE:ANF) stock popped 5.8%. Investors were pumped by the fact that $822 million in quarterly revenue from the teen-focused retailer beat the lowly $804.5 million the analysts had been projecting.

So why are we considering Abercrombie to be a loser? It's not just because we're tired of their aggressively striped polo shirts with jumbo collars or the fact that they snubbed us from modeling in their magazine. It's because those "analyst-beating" revenues were still 2% lower than during the same period over last year. Plus, Abercrombie also suffered a $13 million net loss over the last three months.

The bottom line for Abercrombie is that teens aren't into their look anymore. Abercrombie's own brand stores saw a 1% drop in sales on the quarter, while sales plummeted 7% at their Hollister brand stores. And no one even knows what they plan to do with their failing underwear brand, Gilly Hicks.
3. European stocks highest since '08
Treat yourself to a double-packed Nutella crepe: The Stoxx Europe 600, an index that measures the value of 600 major European stocks, reached its highest level in six years. Greece may have ratified its last bailout package in 2012 and Portugal made a "clean exit" from its bailout last month, but the debt crisis that crushed stocks across the pond in 2011 ain't over -- unemployment remains at depression levels in Spain and Greece. So what were European investors celebrating? The profits their companies are making in other markets, like the U.S. and China.

4. U.S. GDP surprisingly contracted 1%
We know you tossed on extra North Face layers this past winter, but Wall Street didn't think the weather was this bad: U.S. GDP actually contracted at a 1% annualized rate in the first three months of 2014, compared with the initially small 0.1% growth analysts estimated. Consumers stayed home and weren't consuming, so companies held back from producing and investing in machinery and equipment. Investors hope the second quarter will return to normal so GDP can reach the 3%-plus per year GDP growth that reduces unemployment and lifts wages.

As originally published on MarketSnacks.com

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MarketSnacks has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Michael Kors Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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