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By Jason Stipp | 12-16-2011 10:00 AM

Not What It Seems?

Morningstar markets editor Jeremy Glaser says the week's news on Intel, Best Buy, and the EU summit may be different than it appeared.

Jason Stipp: I am Jason Stipp for Morningstar, and welcome to the Friday Five.

Anyone who's seen the market rally on bad news, or no news, and correct on seemingly good news knows that things are not always what they seem.

Morningstar markets editor Jeremy Glaser has seen several such examples in the headlines this week. He is here to share them with us today.

Thanks for joining me, Jeremy.

Jeremy Glaser: You're welcome, Jason.

Stipp: So, what do you have for the Friday Five?

Glaser: We're going to talk about Best Buy, Europe, Intel, the Presidential race, and finally the economy.

Stipp: So, Best Buy had a relatively troubling report, at least for investors. The stock went down after they reported some recent results. Does this mean that the economy and the consumer spending, which had seemed like it was getting traction, is really faltering?

Glaser: Best Buy really took a hit this week when they announced that they just had a really tough quarter. Their margins compressed; the average sales size went down. They're just seeing a lot of pressure, and I think that it's easy to kind of jump to a conclusion, and say the consumer is totally scared, they're not out there buying, and the holiday season is going to be awful. But I think what's really happening here is more of a secular competition trend against Best Buy than it is that consumers just aren't buying electronics anymore.

There are just so many more options, including Amazon, going online, going to your Wal-Mart, your Target, which is really expanded into the consumer electronics space. You have so many more options of where to buy things, Best Buy isn't necessarily the top of everyone's mind--especially as physical media sales [decline]. So people aren't out there buying actual CDs and actual DVDs anymore, that loses a lot of foot traffic to the stores. It's just a tough competitive positioning for Best Buy.

So, they're going to struggle, and they'll probably continue to struggle for some time. They're not going to get back to the highs that they had before. But it doesn't mean that the entire economy is collapsing, the consumer is collapsing. It just means that there are some trends that are really hurting the competitive advantages of Best Buy.

Stipp: So, important to peel back the onion there.

At the end of last week, there was some positive sentiment about the EU Summit, and the market seemed to be pretty happy about this., And then we woke up on Monday morning and suddenly all of the woes and the concerns about the Eurozone were once again hitting the headlines. What should we think about this right now?

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