Early Easter Gooses March Retail Sales, But May Mask a Spending Slowdown
Easter came a week earlier this year, so in March, consumers bought more vintage tees from Abercrombie (ANF) and more gas grills from Costco (COST) than they normally do. That's according to sales reports from all the major retailers today. But with gas prices clumbing and housing wealth eroding, consumers may be ready to close their wallets the rest of spring. Wal-Mart (WMT), the world's largest retailer, voiced that very concern today. Should you return your retail stocks or keep betting on the resilient American consumer?
Jeff says it’s important to remember that retail is half fundamental and half emotional. Although March sales looked good, we’re coming into a generally sluggish time for retail the sector may be fresh out of catalysts until the back-to-school season. Jeff recommends getting out of some of the riskier retail names – there are still certain retailers he likes, but as a field bet, it doesn’t look good.
Many investors look at stocks like Aeropostale (ARO) or Abercrombie and think they’re parked – they don’t see them moving much to the upside or downside. But Jeff doesn’t think that’s a reason to go long those stocks. He wouldn’t put his money in something on the bet that it won’t go down, he says. And he also wouldn’t go long speculative names right now.
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On APR 12 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:
Strazzini Owns (SNDK), (NWS.A)
Macke Owns (SWY)
Najarian Owns (ARO), (AMLN), (BRCM), (CAT), (COST), (KSS), (MEDI), (PENN), (AAPL), (TLM), (EDS), (BSX)
For the record:
Strazzini Owned (SNDK), (BRCM) On 3/9/07