What should you make of Danaher and Starbucks as these stocks touch new 52-week highs?
“Shares of Danaher hit an all-time high on Monday,” explains trader Mike Murphy. “It’s moved from the 40’s up into the high 50’s now.”
And Murphy thinks the action is very positive, not only for the company but for the economy as a whole.
“This is a big multi-industrial and (the price action) is a great read through for the entire US economy,” he says. “I read the move as sign that end industrial consumers are ordering and the US economy is in good shape.”
Starbucks also made a new high on Monday. “CEO Howard Schlutz knows what he’s doing,” says trade Joe Terranova.
With Starbucks planning a big push in China, Joe T. expects gains to continue.
“I’d trade it long against $54.62- last week’s low,” he says.
Elsewhere in the market, the traders were taking a look at retail after JPMorgan upgraded Kohls from Underweight to Neutral; also JPMorgan said near-term sales trends at J.C. Penney may be softer than expected.
Top trader Patty Edwards thinks JC Penney has potential but she sees it as a long-term play. She compares the new ‘everyday low pricing strategy’ underway at JC Penney to a strategy used by another retailer overseas. “When Walmart tried it in Japan it took 4 or 5 years to get that turned around in the consumer’s mind. Although I love what CEO Ron Johnson is doing, it’s not a quick fix. In the near term, I think Kohl’s will take advantage.”
In the space Joe Terranova likes TJX. "It continues to work and I see no reason to shift out of this," he says.
Mike Murphy suggests a pairs trade - Short JC Penney and long Macy's . "Macy's has a plan in place and it's executing."