Seeking Alpha

Wall Street Str...'s  Instablog

Wall Street Strategies
Send Message
Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
My company:
Wall Street Strategies
My book:
Be Smart, Act Fast, Get Rich
  • Stretching for Goods News By: Charles Payne 0 comments
    Jul 8, 2010 1:30 PM
    The rally is fading, and now the question is can stocks hang onto gains three days in a row? One could argue the early surge was based on nebulous data and minor positives against several negatives such as the bulk of retail same-store sales results. That is a valid way to look at the market, but over the past three months there have been numerous triple-digit point down days based on nebulous data and minor negatives. Sure, this dam seems damned and any straw has the feeling of being the last, yet that isn't the case. Be that as it may, stocks are fractured, reflecting the fractured nature of the economy and psyche of investors/Americans. Moreover, companies and industries that experience any miscues will be subject to adverse reactions from investors. This is difficult terrain to traverse the next earnings season but the winners will be bona-fide winners.

    Today, the bona-fide losers are semiconductor stocks. There was a time when none of the smart guys I knew bought semiconductor stocks. That was a long time ago before the tech boom and bust. They said owning them was like owning a commodity, but of course owning things like gold and sugar hasn't been such a bad deal in the past decade. These days it seems that anecdotally investors would be falling over themselves to own chip stocks. All the good news in the economy involves chips, and all the hype about the future involves chips. Yet, the SOX index is in a decisive downtrend and under pressure again today, leading tech stocks/NASDAQ lower.
     
     
    Another industry slipping today is retail as retailers, as mentioned above, didn't fare too well with same store sales (please view Brian Sozzi's take on the results below and on our website at www.wstreet.com).

    On the upside, oil and oil-related names look better as it appears investors are kicking the tires of the space looking for BP-selloff bargains. Inventory results are helping, too.

    > Crude Oil: drawdown 4,961,000 vs. estimate of drawdown 2,000,000
    > Gasoline: build of 1,320,000 vs. estimate build of 100,000
    > Distillates: build of 321,000 vs. estimate build of 1,600,00
     
     
    How to Obtain Pulse on June Numbers
    By: Brian Sozzi, Equity Research Analyst

    When receiving a truly mixed bag of messages within same-store sales data, which is the case today, determining the next direction in the underlying stocks could be tricky. For instance, on one side of the coin Abercrombie & Fitch (NYSE:ANF), out of the blue, reported a comp 3x higher than consensus forecasts. However, the usually non-promotional retailer had to ramp up promotions to drive the acceleration in its business, so what does that say about the true health of the consumer? Elsewhere, there was Gap (NYSE:GPS), delivering perhaps the dourest commentary on its business in over a year. According to management, traffic was "difficult" and as a result, merchandise margins will take a hit in July in an effort to clear inventory in front of back of school.

    Please visit www.wstreet.com to read remainder of article.


    Disclosure: None
Back To Wall Street Strategies' Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.