Two Ways To Play: I'll Buy That For a Dollar!
Strengthen your portfolio in good times and bad.
According to Bloomberg, stores that specialize in items that cost $1 or less are outperforming other US retailers as consumers shun high-priced goods in favor of cheaper alternatives. 99 Cents Only (NDN), Dollar Tree (DLTR) and Family Dollar (FDO) had the highest returns in the Russell 3000 Retail Index among companies with at least $1 billion in revenue.
99 Cents Only led the list with a 59% year-to-date gain (including dividends) through yesterday's close. Ranked fifth on the list was Wal-Mart (WMT), the world's largest retailer, with a 17% gain. This news comes as the International Council of Shopping Centers said yesterday that same-store sales rose at their weakest weekly pace since April.
For context on the economy, see Toddo's The Great Expression.
From the Bull Pen: The charts for these discount stores are compelling, especially when compared to luxury retail. But bulls looking to play these stocks should wait for a pullback. For Family Dollar, one option is to enter if and when the stock can fall to near the $24-$25 level.
From the Bear Cave: Is Sony (SNE) headed below $20 in the near future? Bears can set a tight buy stop above $23.
Quick Check Around the World
Asian trading closed with the Hang Seng -0.73%, Nikkei -1.29%, Sensex -3.08%, Taiwan -0.50% and Shanghai 0.84%.
Glancing towards Europe, we see the CAC 1.25%, DAX 0.80%, FTSE 1.36%
As of 8:20 a.m. EST, S&P Futures are trading -3 to 890, and Nasdaq futures are -10 to 1213.
A Look At Commodities
Crude oil is trading -1.07 to 58.26. Gold is -2.900 to 729.90. Silver is -0.185 to 9.620 and copper is -10.40 to 164.25.
The dollar index is +0.242 to 87.317.
On the Radar
07:00 Bloomberg Global Confidence
07:00 MBA Mortgage Applications
03:00 ABC Consumer Confidence
Click here for the full trading radar.
Good luck today!
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