Two Ways: Retailers Go Back-to-School
Strengthen your portfolio in good times and bad.
It's back-to-school season as shoppers rush to the stores scrounging for bargains. But a Barron's interview with Citigroup analyst Deborah Weinswig cautions investors of a "new normal" when selecting retail stocks.
"You can't just buy the department stores... or the food retailers," Weinswig said. "It has become very story-specific."
Among her favorites are Nordstrom (JWN) and Home Depot (HD), which have been spending considerable investments in upgrading technology to reduce inventory cycle-time.
Retailers that aren't in favor right now include Costco (COST), which is skewed toward big-ticket purchases, and Wal-Mart (WMT), which could be doing more by aggressively discounting.
Weinsberg says there is no fashion. Styles are practically the same as last year and consumers are picking up one or two refresher items. Consumer behavior has changed so much that they're even thinking twice about picking up low-price items.
From the Bull Pen: Despite the negative comment, momentum bulls like the follow-through on Costco's chart. Those playing it can set a 2% sell stop below entry. For the more passive investor, gapfill near $51 could provide a better entry.
From the Bear Cave: Retail bears can keep an eye on Abercrombie & Fitch (ANF). Strength to $32 to $33 could provide a downside opportunity. A buy stop can be set above $34.
Quick Check Around the World
Asian trading closed with the Nikkei 0.70%, India 0.67%, Hang Seng 2.14%, Shanghai 1.71%, and Taiwan 1.24%.
Across the pond, we see the FTSE 0.54%, CAC 0.35%, DAX 0.46%.
As of 8:00 a.m. EST, S&P Futures are trading +11.25 to 1025.00 and Nasdaq futures are +16.25 to 1652.25.
A Look at Commodities
Over in commodities, crude oil is +1.82 to 69.80 while gold is +9.30 to 1006.00 this morning. Silver is +0.48 to 16.77 and copper +7.850 to 292.80.
The dollar index is -0.7400 to 77.2700.
On the Radar
02:00 Consumer Credit
Click here for the full trading radar.
Welcome back! Hope you had a great weekend! Good luck!
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