Tuesday December 23, 2008 Navivest

While it is possible we could see a holiday rally and stock futures are currently indicating a slightly higher open at 6 AM, there is still a very bearish overcast on the markets.

Volume will be light and we will be hearing how much of a poor retail environment this is this holiday, which could put pressure on retail stocks. Walmart is the one bright spot, as consumers look to stretch their spending dollars.

Today, we get more economic news that will show the fragile state of the economy. Among the economic news due out, are GDP and New and Existing Home Sales numbers.

On an annualized basis, forecasters are looking for existing homes sales of 4.93 million and 420,000 for new homes.

Mortgage rates have been trending downward, with the curve steepening in the last month. So there is a chance that that could have drawn

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In this post, we discuss Dollar Tree (DLTR), 99 Cents Only (NDN), and Wal-Mart (WMT).

With less than a week before Christmas Day, we thought it would be a good time to check in on the retailers to get an idea of how things are going.

Many parking lots were packed at large malls and smaller strip malls. Foot traffic trends appear to be getting stronger after trailing off the first two weeks of December. However, shoppers are searching for the best deals and only responding to the biggest markdowns.

The bigger the markdowns, the more shoppers are interested in buying. As we move closer to December 25, we expect to see this promotional activity increase. Typical promotions include buy one get one 50% off; take an additional 50% clearance items or already marked down items; and everything 50% to 70% off.In addition, here a few trends we will be

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Adam Lass says it’s not too late to make profits in the retail sector. As an “anxious” holiday season approaches some stocks could be cut in half again. Adam says put options on the most vulnerable retailers can yield triple-digit gains. An alternative is to buy a put contract on a retail sector ETF (NYSE:XLY).

This from Taipan Daily:

Damien Hirst creates grotesqueries. Grand statues of pregnant mothers’ intestines… drowned sheep in tanks of blue water… corpses in full wedding regalia lying under a table.

His conflations of birth, love and death have made him the darling of the art world in recent years. As aberrant as it might seem to place a diamond-covered human skull in the lobby of an office building, this sort of odd behavior is actually quite the norm at the peak of an inflationary bubble.

After all, it makes about as

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Friday November 14, 2008 Navivest

Retail stocks will be front and center today as we got earnings report from several key retailers yesterday evening.

Walmart (WMT) reported third quarter earnings that rose ten percent from the comparable period last year, on a 7.4 percent rise in revenues to $98.64 billion in the quarter. Walmart, which prides itself on its low prices, is attracting more consumers who’ve had to tighten their belts as the economy continues to falter. The company in comparison to the rest of the stock market is doing very well and is the best Dow performer this year.

Wall Street was happy with the results for the quarter, but even as the company reported a sterling quarter, it also lowered its earnings forecast for the full year.

Kohl’s (KSS) on the other hand reported a 17% drop in profits while Nordstom (JWN) reported a 57% drop in profits.

Additionally, at 8:30AM

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I’ve clearly laid out my reasons why the U.S. dollar has rallied sharply versus most of the world’s currencies … and why it’s got a lot of room left to climb. But in case you missed my previous analysis, here’s a recap: Contagion from major credit market illnesses has gone global … Global economies big and small are taking a hit … Demand for natural resources and everyday exports has shriveled up … Global investors are pulling capital out of riskier, foreign markets and bringing it to the U.S. … And demand for U.S. dollars and safer, dollar-based assets has risen. In short, a major foreign exchange rebalance is underway. During this rebalancing, a lot of attention was paid to the euro and the ...

If we are lucky, this US recession might only last two years, says Adam Lass. The economic rot is spreading from banks to consumers to factories…and then back again in a vicious cycle. Investors can use this period to buy up healthy firms at rock-bottom prices.

This from Taipan Daily:

Let’s start with banks now that Washington is such a major player in this area. Both New York University’s Professor Nouriel Roubini and myself have delivered many early warnings on this topic.

However, where I have been primarily concerned with the possible fates of the 117 on the FDIC’s watch list of dangerously undercapitalized banks, Professor Roubini notes that some 8% of the 8,500 banks the FDIC insures are in just as deep a hole.

Now he warns that despite Washington’s pledge to back each and every bank, in the end, it will be forced to perform triage, and abandon the

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Taubman Centers, Inc. (TCO) is a real estate investment trust (REIT) engaged in owning, developing, acquiring, and operating regional shopping centers throughout the U.S. A large number of these shopping centers are strategically located in major metropolitan areas. The company's five largest non-anchor tenants are: The Gap (3.5% of mall GLA as of June 30, 2008), Forever 21 (3.3%), Limited Brands (2.6%), Abercrombie & Fitch (2.5%), and Foot Locker (1.9%).

We are concerned about retail stocks in a very uncertain economic environment. Consumer spending patterns are sluggish, and we expect 2008 to be one of the worst holiday shopping seasons in years. TCO missed our 2Q FFO estimates by $0.08 per share due to lower than expected fee income and higher expenses.

Overall, the company's portfolio continues to perform well; TCO reported increases in rents, sales and occupancy in the 2nd quarter vs. the year-earlier period. Additionally, the company has

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Despite a massive surge in stock prices due to the government plan to bolster a floundering economy, Friday saw the value of many retail stocks fall. Randal Konik, an analyst with Jefferies & Co. warned of a turbulent recovery period ahead for apparel retailers. According to Mr. Konik, investors should “expect significant stock volatility through year-end with a downward bias, while meaningful sector improvement is likely more than 12 months away.”

Let us hear your thoughts below:

This market will drive a sane person batty at times, I have to tell you. Remember about 2-3 months ago, every day oil dropped people ran into technology stocks as a "safe haven"? We were shaking our head sadly and saying, how is this a safe haven... in time this will be proven to be a false assertion. But that did not stop the stocks from running up 5-10-15% each time oil dropped a few bucks as hedge funds had to find something to "play". Remember, as we always say, perception is reality. Until reality strikes. Lately we've seen poor earnings from Dell (DELL), we've seen bad news out of the semiconductor industry yesterday, Corning (GLW) is struggling, we've seen Qualcomm (QCOM) ...

With several more retailers expected to report quarterly earnings this week, we sat down for a chat with Zacks senior retail industry analyst Rob Plaza, CFA for his outlook on the sector as a whole, and what his top Buy recommendations are.

Wal-Mart had a pretty good Q2. Does this indicate that other retailers should post stronger earnings this week and beyond?

What is good for Wal-Mart (WMT) is not necessarily good for other retailers. Wal-Mart continues to perform well in this environment because of superior inventory management, logistics, and cost controls. This focus on operating costs give the company a huge competitive advantage, and the company passes along those savings to its customers. As a result, consumers shop at Wal-Mart to get more value for their dollar.

That said, Wal-Mart and most retailers should report decent results for the second quarter thanks to the government stimulus checks.

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