Market Wrap-Up for Sept.5 (FDX, UPS, UNP, LLY, TWX, more)

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In a market that should be focused on fundamentals, we once again get accommodation rumors from central bankers that stop any sort of needed market reality check (pullback) from taking place.

This morning we saw fundamental worries from FedEx ( FDX ), with the company significantly cutting guidance , and yet, the markets are fixated on the potential for further easing strategies. Goldman Sachs ( GS ) actually came out with a note saying they expected a FedEx estimates reduction. Yet the brokerage didn't feel the need to make the call beforehand!

We certainly don't want to bring on the dark clouds, but what moves the markets over the course of time is always fundamentals. Commodity stocks have been indicating major worries about the global economy, yet Wall Street analysts are just doing what they do best, upgrading and re-affirming positive ratings on the stocks we all know and follow. All the while, these so-called experts aren't realizing earnings power is the biggest ingredient we need to grow the market to a sustained level. Again, despite the caution, we do believe some solid names are worth committing capital to, and we will continue to stay focused on the best places for investors to put their money in a very confusing market environment.

In related news, United Parcel Service ( UPS ) shares were down in unison with the FedEx earnings warning. Other transport plays lagging included Union Pacific ( UNP ) and Norfolk Southern ( NSC ). Elsewhere, we did have a couple of Wall Street analyst upgrades helping lift shares of Time Warner ( TWX ) and Eli Lilly ( LLY ).

The Party's Over

A certain neighbor of mine is known for having the biggest annual Labor Day parties in town. The current owners acquired the house about five years ago, and from what I know about them, they were heavily involved in real estate. They apparently enjoyed quite a bit of success in the years leading up to the purchase.

Fast forward to this past Labor Day, and the home's exterior landscaping is looking quite shabby. The Labor Day parties that used to jam up an entire street had just three cars in the driveway during this year's holiday. Oh, and the home is now back on the market - as a short sale.

It's amazing to see how people can swing from the highest of highs to the lowest of lows in their financial or personal lives. In many cases, folks let early success get to their heads. They get lost in the moment and forget how easily newfound money can melt away if you don't respect it. The scary past is how ill-prepared many people are for such a downturn, despite being involved in an industry (like real estate) where the red flags should have been everywhere they turned. Most real estate professionals I have spoken with describe the beginning of the end for the real estate boom as having coincided with scraping the bottom of the barrel for the least qualified buyers (mortgage brokers actually got to the point of approving mortgage applications based on just a phone bill statement!).

No one ever wants to hear about people struggling, but these are real-life examples that shouldn't be ignored. We need to always be aware that the party could end sooner than most believe. If you practice a free-spending lifestyle, the chances your children will follow your lead are certainly quite strong. On the other hand, if you respect the money you accumulate, your example will certainly make your children hesitate a bit when it comes to going hog wild the first time they get a bit of spending freedom. My daughter smartly saved quite a bit of her earnings from her summer job, at the same time, realized how hard one needs to work to get started in the world we live in. That's a good start, but I'll be there along the way to make sure she stays consistent with her processes. I owe her that much, and we all owe the next generations as many good lessons as possible. Sharing the stories of things going wrong also hits home with my kids as they get older. We all want to see things end well, but not everybody will have the discipline to see it that way.

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Thanks for reading everybody. I'll see you tomorrow!

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing Stocks
Referenced Stocks: FDX , LLY , NSC , TWX , UNP

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