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Amid Sea of Negatives, Will Retail Shine?

Despite a slew of negative economic data, Citi remains bullish on the retail sector. The firm raised its same-store sales estimates in advance of this week's same-store sales numbers.

July was the warmest it's been in 116 years, Citi retail analyst Deborah Weinswig said, so it's likely many people went to the malls to escape the heat. In turn, mall traffic improved sharply in July. The traffic increase followed very strong sales in June when much of the stores' clearance items were sold. Stores received and had been selling new items in July, so Weinswig said there is little discounting.

So what's the trade? Weinswig likes two names in particular — Macy's and Target . She said both retailers have great prices and fashion, too.

Patty Edwards, chief investment officer at Trutina Financial, is long Target. Unlike Weinswig, though, she sees a lot of discounting, which doesn't bode well for retail.

Author Stephen Weiss wouldn't touch retail right now. With weak employment and higher gas prices, Weiss said it won't be long before consumers stop spending. He recommends selling retail names.

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At the conclusion of Monday's "Fast Money Halftime Report," the traders commented on where they think the market will go.

Stuart Frankel's Steve Grasso doesn't like the technicals. He thinks the averages could fall into negative territory.

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Considering the poor jobs situation, Weiss is also negative on the market.

Both Edwards and RiverTwice Research's Zach Karabell agreed. They think the markets could fall, too. Karabell said he'd be long throughout the week.

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Trader disclosure: On Aug. 1, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Steve Grasso owns (AMD); Steve Grasso owns (ASTM); Steve Grasso owns (BA); Steve Grasso owns (BAC); Steve Grasso owns (C); Steve Grasso owns (D); Steve Grasso owns (JPM); Steve Grasso owns (LIT); Steve Grasso owns (LPX); Steve Grasso owns (LVS); Steve Grasso owns (MAR); Steve Grasso owns (MHY); Steve Grasso owns (NDAQ); Steve Grasso owns (PFE); Steve Grasso owns (PRST); Steve Grasso owns (XHB); Steve Grasso owns (XLB); Steve Grasso owns (XLI); Weiss Owns (TBT); Weiss Owns (JPM); Weiss Owns (QCOM); Weiss Owns (DVN); Weiss Owns (COP); Weiss Owns (KO); Weiss Owns (MDRX); Weiss Owns (SLV); Weiss Owns (VZ); Weiss Owns (NS); Weiss Owns (ETP); Weiss Owns (SDS); Weiss Owns (TWM); Weiss Is Short (X)

For Steve Grasso
Stuart Frankel & Co and it’s partners own (AAPL)
Stuart Frankel & Co and it’s partners own (CSCO)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HPQ)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MET)
Stuart Frankel & Co and it’s partners own (MU)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RHT)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners own (UAL)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (YHOO)
Stuart Frankel & Co and it’s partners own (QQQQ)

For Patty Edwards
Edwards Owns (AMZN) For Clients
Edwards is short (AAPL) For Clients
Edwards Owns (COST) For Clients
Edwards Owns (GOOG) For Clients
Edwards Owns (SLV) For Clients
Edwards Owns (GLD) For Clients
Edwards Owns (ERF) For Clients
Edwards Owns (KMP) For Clients
Edwards Owns (AGNC) For Clients
Edwards is owns the Canadian Dollar

For Deborah Weinswig
Citigroup Global Markets Inc. and/or its affiliates has a significant financial interest in relation to CVS Caremark Corp, Home Depot Inc, JC Penney Co Inc, Kohl's Corp, Kroger Co, Lowe's Cos Inc, Nordstrom Inc, Safeway Inc, SUPERVALU INC, Target Corp, Wal-Mart Stores Inc, Costco Wholesale Corp. (For an explanation of the determination of significant financial interest, please refer to the policy for managing conflicts of interest which can be found at
www.citigroupgeo.com.)

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