Two Ways To Play: Unsexy July For Abercrombie
Strengthen your portfolio in good times and bad.
According to the Wall Street Journal, teen retailers suffered through a dismal performance for the month of July. Companies like Abercrombie & Fitch (ANF) and American Eagle (AEO) posted same-store sales declines of 7% and 13% respectively as the market was hurt by record energy prices as well as a 14% annual decline in teen employment amongst 16- and 17-year olds. Overall, retailers in the U.S. posted a smaller gain in same-store sales as a boost from government stimulus checks faded.
For July, retailers recorded a 2.3% gain according to data by Retail Metrics. That compares with a 4% increase in June. For more see Professor Jeff Macke's Retail Round-Up: Wal-Mart, Target Disappoint.
From the Bull Pen: Bulls can look to a different type of retail, CVS/Caremark (CVS). Entry may be set near the $35 mark should it reach that level; sell-stops can be set below that point.
From the Bear Cave: Bears can play the downside in J.C. Penney (JCP). Buy-stops can be set above the 50 DMA ($35).
Chinese Stocks Plunge
Bloomberg reports equities plunged in China hours before the Olympic Games opened after the government held back in announcing any market-supporting measures as some investors had predicted. China Cosco Holdings, (CICOF), the world's largest operator of iron-ore and coal hauling ships, dropped to the lowest levels in a year amid concerns that a slowing U.S. economy is curbing demand for products made in Asia. China's benchmark CSI 300 index plunged 4.7% to the lowest levels since March of 2007. Todd mentioned China in The Recovery and the Storm.
From the Bull Pen: Professor Udall has mentioned a play in Yingli Green Energy (YGE). YGE should succumb to weakness given the overall sentiment, but traders can fade (read:buy) the stock into $14 support. Tight sell-stops can be set below.
From the Bear Cave: The China 25 Index (FXI) is following a perfect downtrend from its October 2007 high. Bears can press the downside with buy-stops above the $45 mark.
For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.
Quick Check Around the World
Asian trading closed with the Hang Seng -0.99%, Nikkei +0.33%, Sensex +0.33%, Taiwan +2.63% and Shanghai -4.47%.
Over in Europe we see the CAC +0.52%, DAX +0.15%, FTSE -0.01%
As of 8:25 AM EST, S&P Futures are trading lower -1 point to 1266, and Nasdaq futures are higher by +1 point to 1887.
A Look At Commodities
Commodities are mostly lower. Crude oil is down -1.72 to 118.30. Gold is off -6.30 to 864.40. Silver is off -0.417 to 15.840, and copper is unchanged at 345.80.
The dollar index is up +0.889 to 75.430.
On the Radar
8:30 Nonfarm Productivity; 2.5% cons, 2.6% prior
8:30 Unit Labor Costs; 1.4% cons, 2.2% prior
10:00 Wholesale Inventories; 0.6% cons, 0.8% prior
Happy Friday! Good luck and have a great weekend!
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