Posts Tagged goldman-sachs
Retail Chain Store Sales Recovery in Question
Posted by admin in Uncategorized on March 10th, 2010
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Retail Chain Store Sales were reported to be recovering based on September’s sales data reported on Thursday. However, upon closer inspection, we do not see recovery perfectly clear. If you have been reading “The Greek,” then you already know why.
(Tickers: TGT, M, JCP, GPS, AEO, TJX, KSS, GS, DIA, SPY, QQQQ, NYX, DOG, SDS, QLD, XLF, IWM, TWM, IWD, SDK)
The International Council of Shopping Centers (ICSC) - Goldman Sachs (NYSE: GS) produced its preliminary report for September’s Chain Store Sales on Thursday. According to the ICSC, those sales inched higher by 0.1% in September, offering what its Chief Economist Michael P. Niemera called, “the beginning of recovery.”
Retail Chain Store Sales Recovery in Question
Most would use caution in predicting recovery based on such a small increase, and on preliminary data nonetheless! Yet popular media sounded the same song on Thursday, while also inspired by lower than expected weekly jobless claims. Thus, a market that was hungry for a reason to recover, gained ground on the day. The S&P 500 Swindex rose 0.75% yesterday, and the Dow Jones Industrials moved 0.63% higher.
However, your favorite truth-teller, Wall Street Greek, feels compelled to warn you of the shenanigans run amok. The first sales gain since July 2008 got a special boost you see. Labor Day arrived especially late this year, in fact, as late as it could possibly be. School does not start until summer officially finishes though. Thus, “back to school” shopping season extended deep into this past September. We warned about this “pending” event about a month back, but you forgot about anyway didn’t you?.. Taking the late Labor Day impact into account, a 0.1% gain does not offer an ounce of enthusiasm. So, we would expect that as the market gains better understanding of this, these resulting gains will dissipate. So now that we have stolen the ICSC’s thunder, let’s review the store tally.
The September Sales Tally:
| Company | | Ticker | | September Sales |
| Target | NYSE: TGT | -1.7% |
| Macy’s | NYSE: M | -2.3% |
| J.C. Penney | NYSE: JCP | -1.4% |
| Gap Inc. | NYSE: GPS | -1.0% |
| American Eagle | NYSE: AEO | No Change |
| TJX Cos. | NYSE: TJX | +7.0% |
| Kohl’s | NYSE: KSS | +5.5% |
Making a Case to the Contrary:
We owe it to ourselves and to you to consider all angles to an issue, and you are always guaranteed to get unbiased opinion from me. I have no interest here; I am not selling anything to you or the companies I’m addressing; nor am I doing any business with the government or anyone who might have an interest in how this story is reported. So here’s the other side of the story.
Part of the reason the market grew enthusiastic Thursday was because of a second report. Retail Metrics, Inc. reported that September same-store sales increased 1.1% last month, significantly more than the ICSC noted for September chain store sales. Also, many of the companies reporting their individual sales beat analysts’ estimates. In fact, according to Retail Metrics, 70% of retailers reported better numbers than the average figures the statistician compiled from analysts.
Even so, Labor Day falling on September 7, versus September 1st last year, is BIG! It plays a significant role when we are speaking about “back to school” shopping season. It’s also very likely that sales that may have not occurred in August, might have led panicky retailers to slash prices and promote products to lure in last minute September sales. So from my perspective, because of the special Labor Day factor, we cannot call the “beginning of recovery” in retail just yet.
Please see our disclosures at the Wall Street Greek website and author bio pages found there.
Week Ahead: Easter Baskets Full of Trouble
Posted by admin in Uncategorized on March 9th, 2010
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Your five week old stock market rally is up against an Easter basket full of trouble in this week’s economic schedule and earnings report slate. Plenty of potential pitfalls lie ahead, and the technical stretch that has taken us this far seems to have the market precariously poised for a bunny hop in the wrong direction.
The Week Ahead
In “The Greek’s” opinion, the week’s worst threat emanates from the inflation related reports on deck. The Producer and Consumer Price Indexes, both due this week, are well positioned to cause some havoc. It was not even a month ago when the Core PCE Price Index did so, and stocks are all the more lofty. Look for our follow up article on this subject, nearly ready for publishing now.
Monday
The economic schedule is empty on the day after the Easter holiday, but earnings reports are plenty. The EPS schedule highlights news from the likes of Goldman Sachs (NYSE: GS), Bank of the Ozarks (Nasdaq: OZRK), DiamondRock Hospitality (NYSE: DRH), Entrust (Nasdaq: ENTU), First Niagra Financial (Nasdaq: FNFG), Harris Stratex Networks (Nasdaq: HSTX), J.B. Hunt Transport Services (Nasdaq: JBHT), Kona Grill (Nasdaq: KONA), NVR (NYSE: NVR), R.F. Monolithics (Nasdaq: RFMI), Charles Schwab Corp. (Nasdaq: SCHW), St. Jude Medical (NYSE: STJ), Seagate Technology (Nasdaq: STX), Talbots (NYSE: TLB), Vasogen (Nasdaq: VSGN) and Wegener (Nasdaq: WGNR).
Tuesday
Tuesday could prove powerful, as two reports of the market-moving variety are due for release. At 8:30, all eyes will be on the March Retail Sales data. Following relatively improved chain store sales results through the month, as reported by the International Council of Shopping Centers, economists expect decent numbers on aggregate sales Tuesday. Bloomberg’s consensus of economic gurus forecasts a 0.3% monthly increase, and excluding the robust auto sector, flat results. While we expect the March report to please, we have concern about April’s sales. Despite government assurances regarding General Motors (NYSE: GM) warranties, we expect growing concern about its and Chrysler’s potential bankruptcies to impact results. This is despite the incentive programs recently initiated by GM, Chrysler and Ford (NYSE: F). Ford’s April sales stand to benefit significantly from the chaos around GM and Chrysler now.
The ICSC’s regular same-store sales report is due first thing Tuesday morning. In recent weeks, the pace of sales deterioration has moderated. We’ve attributed some of that to the euphoria or renewal, however weakly supported this year, that the spring season seems to always bring. Still, unemployment is rapidly rising, and so we expect a retrenchment to occur after the spring high wears thin. Last week’s data showed a 0.6% increase in the week-to-week sales pace, and a modest decrease of 0.3% on a year-to-year comparison.
March Producer Prices are due at 8:30. Last month’s Core PCE Index price rise fed inflationary concerns, and the market remains very sensitive to this data. Japan’s PPI was just reported down 2.2% in March, the fastest pace of decline since 2002. In the States though, PPI has held stubbornly steady, rising 0.1% in February, and increasing 0.2% when excluding food and energy prices. That same pace of increase is expected for March, as the headline number is supported by increased energy prices.
Wholesale inventories were reported last week improved on a comparable basis to sales, which actually grew. February’s Business Inventories are due this Tuesday at 10:00 a.m. They are expected to have decreased, and possibly at or greater than the pace of sales. The catching up of inventory is a positive factor that economists have not missed. However, recent data is not complete enough to get excited about or call a trend. Inventories are seen falling 1.0% in February, after declining by 1.1% in January.
The Chicago Fed is holding a conference on financial institutions and risk. Several Fed presidents will be in attendance and are scheduled to speak. The meeting is especially interesting, placed not far ahead of bank stress test results. The National Federation of Independent Business will publish its Small Business Sentiment Index. Smaller firms took some time to feel the heat of this recession, but are now feeling it greater than anybody. Rising unemployment and lightened consumer spending impacts them worst. Finally, the Energy Information Administration is expected to produce its short-term outlook on energy.
Tuesday’s earnings schedule highlights reports from AmeriServ Financial (Nasdaq: ASRV), China Grentech (Nasdaq: GRRF), Commerce Bancshares (Nasdaq: CBSH), CSX Corp. (NYSE: CSX), Fastenal (Nasdaq: FAST), Intel (Nasdaq: INTC), Intervest Bancshares (Nasdaq: IBCA), Johnson & Johnson (NYSE: JNJ), Linear Technology (Nasdaq: LLTC) and W.W. Grainger (NYSE: GWW).
Wednesday
It’s April 15th, the last day to file taxes for the 2008 tax year. The Consumer Price Index is due at 8:30 a.m. The report for February was unexpectedly hot, with Headline CPI up 0.4% and Core CPI up 0.2%. One more time, we remind you the market will be sensitive to any sign of inflation. Last month’s reaction to the PCE price data may have been a forerunner of what might occur this time around, given the much more inflated state of stocks. While economists prefer not to see deflation, stubborn inflation is concerning as well, since future inflation might have a hot starting point and ample fuel to burn hotter given a growing economy. Economists see both Headline and Core CPI rising 0.2% for March.
The Empire State Manufacturing Survey has produced an index indicative of economic contraction for more than a year now, and last month’s data showed deterioration to a level of -38.2. Even if the measure improves to the anticipated -34.0 for March, it won’t bring a happy day. Last month’s New Orders Index was worse than the composite measure, portending more trouble for April.
The Treasury International Capital Report showed a net outflow of $43 billion in January, but given quantitative easing initiatives, we would expect improved demand for long-term debt instruments in March. As for February, which will be reported on Wednesday, your guess is as good as mine; but I would lean toward a similar outflow like that seen in January.
The ongoing global economic downturn and depressed global spending looks to set industrial production into its fifth consecutive month of contraction. The March data, which is due at 9:15 a.m., is seen contracting 0.8%, compared to the February drop of 1.4%. Capacity Utilization is expected to have fallen to 70.0% in March, versus 70.9% in February. Both data points have been in free fall since the middle of last year. A change in that trend would be uplifting.
The EIA will post its Petroleum Status Report at 10:30 on Wednesday. Last week’s data offered news of 1.7 million barrels added to petroleum stocks. Gasoline prices have been rising, so gasoline inventory build is welcomed ahead of the summer driving season. We got a small build last week.
Don’t miss SEC Chairwoman Mary Schapiro’s roundtable on the credit-rating agencies Wednesday. At 1:00 p.m., April’s Housing Market Index is due for release. Home-builder sentiment has been at historic and dramatic lows, but considering the nascent rally and decent economic data, not to mention industry M&A chatter, we smell a bit of optimism possible this time around. The Fed’s Beige Book is due at 2:00 p.m.
Wednesday’s EPS schedule includes Abbott Labs (NYSE: ABT), Acergy S.A. (Nasdaq: ACGY), ADTRAN (Nasdaq: ADTN), American Defense Systems (AMEX: EAG), AMR Corp. (NYSE: AMR), AptarGroup (NYSE: ATR), ASML Holdings (Nasdaq: ASML), Bakers Footwear (Nasdaq: BKRS), China Eastern Airlines (NYSE: CEA), China Southern Airlines (NYSE: ZNH), Crown Holdings (NYSE: CCK), Datalink (Nasdaq: DTLK), Infosys Technologies (Nasdaq: INFY), Kinder Morgan Energy Partners (NYSE: KMP), Lakeland Industries (Nasdaq: LAKE), Landstar System (Nasdaq: LSTR), Lufkin Industries (Nasdaq: LUFK), Medialink Worldwide (Nasdaq: MDLK), MEDTOX Scientific (Nasdaq: MTOX), Mercantile Bank (Nasdaq: MBWM), Pacific Continental (Nasdaq: PCBK), Peabody Energy (NYSE: BTU), PowerShares Dynamic (NYSEArca: PSJ), Piper Jaffray (NYSE: PJC), Polycom (Nasdaq: PLCM), REX Stores (NYSE: RSC), Rurban Financial (Nasdaq: RBNF), Stanley Furniture (Nasdaq: STLY), The Progressive Corp. (NYSE: PGR), Union Bankshares (NYSE: UNB) and Universal Forest Products (Nasdaq: UFPI).
Thursday
Housing Starts are due first thing Thursday morning. Bloomberg’s consensus of economists forecasts the annual pace of starts will drop to 570K in March, from 583K in February. Weekly Jobless Claims stuck hot last week, at 654K, but that was down from the prior week. Economists reportedly see 660K this coming period. The four-week moving average slipped only slightly on the weekly decline last week.
The Philly Fed Survey follows New York’s report, and economists forecast improvement for Philly area manufacturing. The Index is expected to rate -30.2 (still marking deep contraction), versus March’s -35.0.
Atlanta Fed President Dennis Lockhart and San Francisco President Janet Yellen are scheduled to speak at a New York conference on the financial crisis. It will be held at the Levy Economics Institute at Bard College of New York. The EIA’s Natural Gas Report is due at 10:30.
Thursday’s EPS schedule includes Google (Nasdaq: GOOG), J.P. Morgan Chase (NYSE: JPM), Southwest Airlines (NYSE: LUV), American River Bankshares (Nasdaq: AMRB), Amylin Pharmaceuticals (Nasdaq: AMLN), Associated Banc-Corp (Nasdaq: ASBC), Baxter Int’l (NYSE: BAX), Biogen Idec (Nasdaq: BIIB), Briggs & Stratton (NYSE: BGG), CDC Corp. (Nasdaq: CHINA), Charlotte Russe (Nasdaq: CHIC), Courier Corp. (Nasdaq: CRRC), Cypress Semiconductor (NYSE: CY), Cytec Industries (NYSE: CYT), Fairchild Semiconductor (NYSE: FCS), Gannett (NYSE: GCI), Genuine Parts (NYSE: GPC), Harley-Davidson (NYSE: HOG), ICU Medical (Nasdaq: ICUI), Illinois Tool Works (NYSE: ITW), Insteel Industries (Nasdaq: IIIN), Intuitive Surgical (Nasdaq: ISRG), Knoll Inc. (NYSE: KNL), Mission West Properties (Nasdaq: MSW), Myers Industries (NYSE: MYE), Nokia (NYSE: NOK), Parker Hannifin (NYSE: PH), People’s United Financial (Nasdaq: PBCT), Polaris (NYSE: PII), PPG Industries (NYSE: PPG), Renaissance Learning (Nasdaq: RLRN), Sherwin-Williams (NYSE: SHW), Simmons First National (Nasdaq: SNFC), Sonoco Products (NYSE: SON), Tempur Pedic (NYSE: TPX), Titan Machinery (Nasdaq: TITN), Ultratech (Nasdaq: UTEK), Umpqua Holdings (Nasdaq: UMPQ), USA Truck (Nasdaq: USAK), Vascular Solutions (Nasdaq: VASC) and Vertex Pharmaceuticals (Nasdaq: VRTX).
Friday
Oh Trichet, here we go again. ECB President Jean-Claude Trichet is scheduled to address the Research Institute of Japan on Friday. The ECB boss has been amply criticized here for fighting his regions economic dragon with a toothpick, while he has a canon gathering dust. He’ll be followed up by Fed Chairman Bernanke’s noontime speaking engagement at the Kansas City Fed’s conference on Innovative Financial Services for the Underserved.
At 9:55, look for the Reuters/University of Michigan Consumer Sentiment Index to show logical improvement in April. The metric is seen by economists reaching 58.5, versus 57.3 in the last period.
Friday’s earnings schedule include Citigroup (NYSE: C), General Electric (NYSE: GE), Mattel (NYSE: MAT), AO Smith (NYSE: AOS), BB&T (NYSE: BBT), Duckwall-ALCO (Nasdaq: DUCK), First Horizon National (NYSE: FHN), Media General (NYSE: MEG), Preferred Bank (Nasdaq: PFBC), Prosperity Bancshares (Nasdaq: PRSP), Student Loan (NYSE: STU), Valmont (NYSE: VMI) and Westamerica Bancorporation (Nasdaq: WABC).
Please see our disclosures at the Wall Street Greek website and author bio pages found there. (Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK).
