Pros: Retail Gets Worse Before It Gets Better

The trading day opened with a vicious sell-off, as investors reaped profits from last week's huge run-up. The professionals appearing on CNBC expressed skepticism about even the good news and said the numbers are certain to get worse before they get better.

By the numbers, this week doesn't look very good ...

JPMorgan chief economist Bruce Kasman said he expects a slew of rough economic numbers this week. The market has priced-in a drop of 325,000 jobs when the Labor Department reports on November at the end of the week, so the decline will have to be even worse than that to have an effect. He said he's surprised that data from outside the United States has been even worse than here.

Black Friday was a winner, but the jury's still out ...

Scott Krugman of the National Retail Federation said this year's Black Friday was the most heavily promoted he can remember. Sales were up 7 percent -- the best gain since 1932 -- but deep discounts probably curbed profits. A shorter holiday-shopping season this year will hurt, and the week before -- and to some extent, the week after -- Christmas will decide what kind of shopping season it will really be.

Dana Telsey, chief research officer of Telsey Retail Group, said retailers are over-inventoried for the pace of sales, so markdowns will be drastic through the season. Kohl's was a big winner among store chains; Macy's , Aeropostale , and Bath and Body Works were also busy.

How about some chestnuts roasting on an open fire?

The items in "The Twelve Days of Christmas" went up in price by more than 10 percent this year, according to Jim Dunigan of PNC Wealth Management. which compiles the numbers each year. Blame swan inflation, Dunigan said. The seven swans a-swimming went up in price by some $1,400 this year, though birds were mixed overall. Geese were down, and calling birds were flat. (Read story here)

Last week's laggards are the places to go this week

BlackRock's Bob Doll recalled last week's 10 percent market gains, pointed out that financials jumped 28 percent, and recommended a couple of defensive stocks that lagged behind the gainers last week. He said Johnson & Johnson and Amgen still have good prospects, and buying them makes sense as investors cash in on last week's more substantial gainers.

Survive the slump owning companies with "fortress-like balance sheets"

Mike Holland of Holland & Co. admitted no one would ever have imagined General Electric trading at the levels to which it has now plunged. Still, he insisted owning GE and Google (another big loser today) will pay off when things turn around, because those companies will survive and thrive.

Retail stocks: Two picks that make sense, and a counterintuitive play

As the economy worsens, David Schick of Stifel Nicolaus said he sees consumers turning to do-it-yourself projects for their homes and cars, bolstering companies like Home Depot (HD) and Advance Auto Parts (AAP). He also likes luxury retailer Coach (COH) as a long-term retail play because of its clear competitive advantages.

Buy companies that can keep paying big dividends, avoid the ones that need to raise money over the next 12 to 18 months

Peter Andersen of Congress Asset Management advised investors to make careful examinations of companies' online financial statements -- including the footnotes -- to determine their financial needs, and to get a very good sense of whether companies that pay big dividends now can keep paying them.

Private sector must be restored to the financial system for the economy to recover

Stanford economics professor and 2001 Nobel laureate Michael Spence said he foresees continued market volatility until the new administration is in place with a clear plan the markets can respond to. Crucial to recovery are the re-involvement of the private sector and the re-investment of the huge amounts of money now on the sidelines. It's a process that can easily be overdone or underdone.

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CNBC Special Business Coverage:

• Holiday Central: Pulse of the Shopping Season

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