By Brian Sozzi
Today was not a good day for the U.S. consumer for their souls were shown to the world. Those souls are ones of frustration with elected officials, a lack of understanding on topics popping up from Europe, and the mental anguish of feeling like a hamster running on a wheel. More work heaped on employees without the compensation to match the new workload (missing corporate pricing a factor here), which only arose because the colleague sitting next to him/her was given the boot. I mean how else should we analyze the personal income number today? It declined for the first time in two years. Machines doing more, employers squeezing out productivity, jobs outsourced and all of this in spite of an alleged recovery where jobs were created and saved. So how are consumers adapting to this post-recession sad set of realities? They are dipping into their savings accounts to make ends meet; these days making ends meet for many households involves scrimping and saving at a trip to the dollar store. All of this feels so odd for so many different reasons.
Touching upon the final read on Michigan consumer sentiment. Consumer discretionary sector stocks didn't make of a gallant attempt to rally on the upward revision from the preliminary estimate. I think this reflects the simple fact that sentiment is coming off such a depressed state in August, that we have settled into a blah type phase. In the world of economist jargon, this blah phase is called "bumping along the bottom."
As promised, a Friday mad dash of retail thoughts:
- The Street is in love with Abercrombie & Fitch (ANF). When I hear such outpouring of affection by my fellow spreadsheet builders, I think it's appropriate to seek other opportunities in the sector (teen land).
- Watching for Aeropostale (ARO) breakout next week.
- Guess (GES) often touts its international growth plans as a reason to buy its stock. However, the bulging exposure to Europe and China at the moment is sending the stock down the tubes.
- Shoe manufacturers put in consolidation sessions this week. The worst acting name was Crocs (CROX).
- Do you want to own Dick's Sporting Goods (DKS) or a brand like Under Armour (UA) into the holiday season? Give me the brand as the retailer is apt to promote aggressively to sell merchandise should the holiday start slowly.
- Most analysts hold a $150 or so price target on Polo Ralph Lauren (RL), hard to make the case to jack it up further in this global environment. Stock caught a downgrade this week which I think made sense.
- Gosh, Whirlpool (WHR)...really?
- Home Depot (HD) starting to underperform Lowe's (LOW) on the charts. Hmm.