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Stealth Sign Could Reveal Volumes About Consumer

Thursday, 26 Aug 2010 | 5:53 PM ET

Subtle yet telling information about the health of the consumer hits the Street on Friday. What should you be looking for?

We’re talking about quarterly results from Tiffany .

The numbers will be scrutinized by investors as they look for signs to see if affluent shoppers are spending.

Jewelry is a luxury, so strong sales will indicate consumers again feel free to buy non-necessities. Tiffany offers jewelry in a broad spectrum of prices, so analysts will also be watching how lower-priced silver jewelry under $500 is selling as well as how diamond jewelry over $50,000 is selling.

A continued rebound in Tiffany's sales could indicate larger positive trends because its market was one of those hit hardest by the recession and because strong consumer spending overall will be critical to the recovery.

State of the Consumer
A look at which retailers are faring better, with Brian Nagel, Oppenheimer & Co. analyst.

What should you expect?

I think the high end is in pretty good shape, Oppenheimer analyst Brian Nagel tells the desk. We may see a weak Q2 but the high end consumer is pretty well positioned into the end of the year. I have a $50 price target on Tiffany and in the event the stock trades down on earnings – I see anything under $40 is an opportunity, he says.

I established a position in Tiffany on Thursday ahead of earnings, reveals Patty Edwards. I’m in complete agreement with Brian Nagel. 50% of their sales come from overseas and in the US a large amount of sales come from Tiffany's 5th Avenue flagship store which attracts tourists. And their balance sheet is strong. What’s not to love?



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Trader disclosure: On Aug 26, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Cortes is long (FCX), (SFD), (BHP), (BMO), (TD); Cortes is long Crude Oil; Cortes is long Australian Dollars; Karabell owns (AAPL), (BHP), (BP), (C), (CSCO), (FCX), (GE), (GS); Finerman owns (BAC); Finerman owns (IBM); Finerman owns (JCG); Finerman owns (JPM); Finerman’s Firm owns (POT) calls; Finerman’s firm owns (WMT); Finerman's firm is short (IJR); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman’s firm owns S&P 500 puts; Finerman’s firm owns Russell 2000 puts; Jon Najarian owns (CSCO) call spreads; Jon Najarian owns (MMR) calls; Jon Najarian owns (NKE) short calls; Jon Najarian owns (SLV) short calls; Jon Najarian owns (GLD) calls; Jon Najarian owns (CME); Jon Najarian owns (CBOE)

For Zach Karabell
River Twice Capital owns (CSCO)
River Twice Capital owns (GS)
River Twice Capital owns (IBM)
River Twice Capital owns (MSFT)
River Twice Capital owns (NKE)
River Twice Capital owns (POT)

For Patty Edwards
Edwards own (AAPL) for clients
Edwards own (BAC) for clients
Edwards own (C) for clients
Edwards own (CSCO) for clients
Edwards own (FCX) for clients
Edwards own (GE) for clients
Edwards own (GLD) for clients
Edwards own (IBM) for clients
Edwards own (JCG) for clients
Edwards own (JNK) for clients
Edwards own (MSFT) for clients
Edwards own (NKE) for clients
Edwards own (TIF) for clients


For Dennis Gartman:
Funds managed by Gartman own Gold
Funds managed by Gartman own (ANDE)
Funds managed by Gartman own corn
Funds managed by Gartman own (RJA)
Funds managed by Gartman own (POT)
Funds managed by Gartman own (MOS)

Joe LaVorgna
***No Disclosures***

For Brian Nagel
Oppenheimer & Co. Inc. makes a market in the securities of PETM, SPLS, BBBY, ORLY, and TSCO.

For Charles Biderman
Funds managed by Biderman own (GLD)
Funds managed by Biderman own (AAPL)
Funds managed by Biderman own (CRM)

For Brian Stutland
***No Disclosures***

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