JC Penney, Best Buy: Symbols of US recovery?

Adam Jeffery | CNBC

Recapping the day's news and newsmakers through the lens of CNBC.

J.C. Penney: America's uncertain retailer recovery

Notes:

It's Wal-Mart that's supposed to represent the American consumer economy, and Wal-Mart that disappointed this quarter, among many other retailers.

What's good to say about J.C. Penney? With its board battles and lackluster results, call it the problem child of retailing. Well, the woes are still immense, but analysts and investors did find a ray of hope in Tuesday's quarterly report, which showed an improvement in sales from the previous quarter. Though earnings were down, the results heartened investors.

Same-store sales fell nearly 12 percent, but that looked good next to the 16.6 percent drop in the previous quarter. The hedge fund Hayman Capital and billionaire George Soros are betting on a turnaround.

Quotes:

"We're facing headwinds of declining mall traffic. We know where the problems are, how to address them and have the plans in place."—J.C. Penney CEO Mike Ullman

"The [J.C. Penney's] debt, we think, is a great way to play the bet on J.C. Penney's turnaround."—Kyle Bass, founder of Hayman Capital

Cost cutting boosts Best Buy, but can it continue?

Notes:

With all eyes on the consumer as the bellwether for the economy, Best Buy joined J.C. Penney as turnaround retail stories that heartened investors.

Cost cutting was a big factor, though, and it's not clear how much more can be done. CEO Hubert Joly, who took over last fall, has cut jobs, made management leaner and closed underperforming stores. And it's starting to look like the store-within-a-store concept will pay off. Investors may be a tad too enthusiastic, though.

Quote:

"Just a year ago the company was left for dead. ... I think they've done a great job to this point, but I think a lot of what they've cut is the low-hanging fruit. ... Now it gets a lot harder."—R.J. Hottovy, senior retail analyst at Morningstar

Getty Images

Home Depot's solid foundation

Notes:

Improvements in the housing market boosted results at Home Depot. Comparable-store sales were especially impressive, up more than 11 percent in the U.S. And the best may be yet to come if Wall Street optimists are on target.

Quote:

"I still view Home Depot shares as inexpensive. I think if we're having this conversation two years from now, we're going to be talking about a much higher level of earnings for Home Depot as they continue to recover."—Brian Nagel, senior equity research analyst at Oppenheimer & Co.

Unemployment: Where's it falling fastest?

Notes:

Yes, the job market is improving, but as you'd expect, it's doing better in some places than others. In fact, unemployment has recently gone up in more than half of the states. Southern and Western states are showing some of the fastest drops in unemployment rates, though their rates are still high. Experts credit manufacturing growth.

Quotes:

"Some of the old, long-standing comparative advantages are re-emerging as drivers of growth."—Moody's Analytics analyst Steve Cochrane

Getty Images

Labor Day picture best in years

Notes:

It's not just J.C. Penney and Best Buy investors showing confidence. Happy consumers like to go places and spend money. At least, that's what AAA says to explain its latest Labor Day travel survey, which shows more Americans plan to travel on the long holiday weekend this year than on any since September 2008. AAA credits economic improvements.

Quotes:

"As home prices improve in many parts of the country, more families are feeling comfortable about traveling this Labor Day holiday."—AAA President and CEO Robert Darbelnet

Next emerging market crisis: The Fed?

Notes:

Everyone knows that investors in U.S. stocks are jittery over Fed tapering, but how does the expected reduction in Fed bond buying affect emerging markets? More than you might think, says CNBC's Rick Santelli. Easy money trickles into all sorts of out-of-the-way places, and when it's no longer there, those companies and industries may suffer. So, investors beware.

Quotes:

"The mouse traps are snapping. ... It might be time to play a little defense."—CNBC's Rick Santelli

Getty Images

Obama prods regulators to, well, regulate

Notes:

Remember "too big to fail"? Well, the issue's still with us, because regulators have a long way to go to finish writing the new rules required by the 2010 Dodd-Frank financial reform law. President Barack Obama met with a raft of regulators to urge them along. Since the big banks are even bigger than they were before the financial crisis, critics worry about a continuing risk of financial contagion.

Among the key rules still not finished are the Volcker Rule limiting risky investments by banks, rules setting standards for prudent financial behavior, capital requirements and margin limits for derivatives.

Quote:

"More work needs to be done."—White House spokesman Josh Earnest

And another thing....

Notes:

As if Tesla needed any more positive press ... On Monday, we mentioned the popularity of the Tesla S electric car, so here's an addendum: it's also safe. Really safe. The company says the government gave the car the highest rating ever given. Thank the fact that the electric car doesn't have a large gasoline engine block.

Quotes:

"There will be a segment of the population that will find the safety issue a compelling reason to buy the car."—Theodore O'Neill, managing director at research firm Litchfield Hills Research

—By Jeff Brown, Special to CNBC.com.