The BoE got a step closer by cutting 50 bps to 1% as expected, The ECB has decided to sit the race out by keeping rates unchanged at 2%.
Futures dropped 6 points as weekly jobless claims were worse than even the most pessimistic assumptions.
1) Retail sales. Overall results were poor, but there were winners and losers:
a) Wal-Mart up 2 percent pre-open as same store sales increased 2.1 percent vs. 1.1 percent expected, but they are no longer providing monthly sales guidance--only do it 4 times a year.
b) Abercrombie is up nearly 5 percent as the 20 percent decline was not as bad as the 25.6 decline expected;
c) A few were really ugly: Saks (down 24 percent vs. down 15.5 expected), Gap (down 23 percent vs. 15.3 expected), and American Eagle (down 22 percent vs. down 14.1 expected).
d) While results were poor, it's surprising that few actually lowered guidance (Target, Costco and Fred's , while JC Penney lowered the high end of guidance), while several reiterated guidance (American Eagle , Pacific Sunwear , Stage Stores ) or said they would be at the high end of guidance (Zumiez), and a few even raised guidance or said they would exceed previous guidance (Ross Stores , Aeropostale , Hot Topic , Macy's , Kohls , Gap, Gymboree ).
Off price discounters--TJX and Ross Stores--both had positive comments: Ross Stores said raised guidance and said margins improved, while TJX said guidance would be at the high end of the previous range.
Little comment, however, on 2009.
2) Surprise! Visa up 7 percent pre-open as both Visa and Mastercard beat earnings estimates. Both seemed to buck trends that seem to materialize at AmEx and Capital One; Visa saw increases in spending volume. MasterCard did say that 2009 net revenue growth would likely be lower than the long-term objective, while Visa said that net revenue growth for 2009 will likely growth in the low-single digits, below the company's prior projection of 11 to 15 percent.
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