Two Ways: Saks Fifth Avenue's Fashion Faux Pas
Strengthen your portfolio in good times and bad.
It's All in the Retails
Bears have been focusing on luxury retailer Saks Inc. (SKS). The New York Times reports bankruptcy rumors have been swirling around the owner of upscale department store Saks Fifth Avenue amidst double-digit sales declines and merchandise markdowns of up to 75%.
Executives did their best to defend the company yesterday. On a conference call, CEO Stephen Sardove said he's implementing a new plan aimed at cutting costs and introducing less expensive merchandise. CFO Kevin Wills added that, should the company need to do something drastic, it owns valuable real estate that provides a level of flexibility. The market rewarded the comments by sending shares up 13% in yesterday's session.
For more retail ideas, see Professor Jeff Macke's Morgan Stanley's Grim Win-Win Scenario.
From the Bull Pen: Bulls may be better off looking to discount retailers like Wal-Mart (WMT). Sell stops can be set below recent lows near $46-$47. Another option is Target (TGT); sell stop can be set near $26.
From the Bear Cave: Bears can look to teen retailer Aeropostale (ARO). Near $26 could serve as a better downside entry. If and when.
Quick Check Around the World
Asian trading closed with the Hang Seng -0.85%, Nikkei -0.04%, Taiwan 0.55% and Shanghai -3.87%.
Glancing towards Europe, we see the CAC 1.66%, DAX 2.08%, FTSE 1.48%
As of 8:00 AM EST, S&P Futures are trading +14 to 776, and Nasdaq futures are +17 to 1171.
A Look At Commodities
Crude oil is trading 0.89 to 43.39. Gold is -20.8 to 945.40. Silver is -0.44 to 13.430, and copper +3.50to 155.95.
The dollar index is -0.5300 to 87.5900.
On the Radar
08:30 Durable Good Orders -2.1%
08:30 Initial Jobless Claims 630k
08:30 Continuing Claims 4981k
10:00 New Home Sales 325k
Click here for the full trading radar.
Thirsty Thursdays! See you at Stagg's Head after work! Good luck!
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