Jan 29th

By Dian Vujovich

Tomorrow, January 29th is supposed to be a really big day. At 8:30 a.m. 4th quarter GDP numbers are to be released. Wall Street statisticians are expecting the number to be super. So are many investment pros.

I met with Louis Navellier in Naples last week before an investor program at the Naples Grand Beach Hotel.

Navellier is optimistic about the stock market and the report coming out. “The big news is going to be on Friday, January 29th. GDP is supposed to be up 4.3 according to a survey of 56 Wall Street journal columnists. But my favorite guy, Edward Yardeni, says they are going to be up 6.5 percent.”

I asked this well-known asset manager, “What if it’s not?”

“Well, then they’re going to be up at least 4.3 because there has been lot of inventory rebuilding.”

He’s right. Inventories, after being sliced big time, have been replenished. Navellier says it’s businesses that are rebuilding their inventories.

But what businesses?

From a simple retail perspective, I made a trip to The Gardens Mall yesterday and saw a number of stores gone. G-O-N-E gone. Even the Apple store, that used to be like always jammed, wasn’t crawling with prospective buyers. Then, when I look at what’s happened to the mall on Palm Beach Lakes Boulevard, see gas prices heading over $2.90 to nearly $3 a gallon, and see unemployment figures in Florida over 11 percent I can’t help but be concerned about who are the buyers of these replenished inventories will be going forward.

With the DJIA closing down over 115 points today, a large percentage of companies reporting better than expected earnings, some like Ford with super-duper sales, others not so hot, tomorrow’s GDP numbers ought to make for an interesting day.

Navellier is expecting the earnings figure to be the best in his lifetime. Sort of like a Buzz Lightyear moment. “Earnings are going to infinity and beyond,” says the Manalapan resident. Part of that zestful outlook, he explained, is because those inventories have been depleted for the past 13 months.

We’ll see.

UPDATE: At 8:37 AP this morning ( 1/29/10) reported:

•that the economy grew in the 4th quarter by a 5.7 percent annual rate. “The fastest pace since the third quarter of 2003.”

•and the Commerce Department said the report is this is strong evidence that the worst recession since the 1930s ended last year.

The guys, Navellier and Yardeni, were right on.

But as I wrote yesterday, wonder who is going to be buying all those replenished inventories given the state of the state of the individual consumer’s pocketbook. And recession ended? Again, we’ll see.