Two Ways: Retail Recovery?

By Terry Woo  SEP 17, 2009 8:30 AM

Strengthen your portfolio in good times and bad.


Retail Report

Is the US consumer regaining its confidence? In a story by Reuters, grocery store chain Kroger (KR) said shoppers are starting to buy national brands again, instead of cheaper generic brands.

Meanwhile, Best Buy (BBY) also said it’s seeing sales trends improve and store traffic stabilize, but customers are still stuck toward lower-priced items.

But the trends described by these retail chains are largely in-line with the type of sluggish growth that many economists and the Federal Reserve expect.

Possibly most revealing were comments made by Wal-Mart (WMT) Chief Executive Mike Duke, who said recently that customers remained cautious and were shunning even lower-quality “throw-away” items.

For more on retail, see Professor Kristin Graham’s Why Best Buy Could Be a Bargain.

From the Bull Pen: Professor Graham makes a compelling case on Best Buy. Investors playing it can start an initial position here. A sell stop can be set below $37, near the current 50-day moving average.

From the Bear Cave: Bears are keeping an eye on Kroger. The stock gapped down big because of missed earnings earlier this week. A rally back to that level ($21.70) could provide one with a downside opportunity. A tight buy stop can be set above that level.

Quick Check Around the World

Asian trading closed with the Nikkei 1.68%, India 0.20%, Hang Seng 1.71%, Shanghai 2.02%, and Taiwan 0.50%.

Across the pond, we see the FTSE 0.77%, CAC 0.47%, DAX 0.58%,

As of 8:20 a.m. EST, S&P Futures are trading +1.50 to 1064.75 and Nasdaq futures are -2.000 to 1715.75.

A Look at Commodities

Over in commodities, crude oil is -0.23 to 72.28 while gold is -1.90 to 1018.00 this morning. Silver is -0.45 to 17.39 and copper -3.450 to 288.60.

The dollar index is +0.0650 to 76.5250.

On the Radar


08:30 Building Permits (570k cons.)
08:30 Housing Starts (588k cons.)
08:30 Initial Claims
08:30 Continuing Claims
10:00 Philadelphia Fed

Click here for the full trading radar.

Happy Thirsty Thursday! Good luck!
No positions in stocks mentioned.

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