Trader Talk

Retail Sales Disappoint

Uh-oh, looks like big sales are coming. November Retail comp store sales are disappointing. RetailMetrics started off the month estimating gains of 2.6 percent for November compared to the same period last year, but by the end of the month it was down to 2.2 percent, and the final numbers may be even worse. It looks like about 75 percent are missing expectations; normally 60 percent beat expectations. Ugh!

The easiest comps in years, and many companies still couldn't post positive numbers.

Among the disappointments:

Consumer Nation Holiday Central Edition

1) Teen retailers not good: Abercrombie missed big, down 7 percent pre-open, Aeropostale guidance was flat, down 8 percent pre-open; American Eagle in line, with fourth quarter guidance about in line with consensus.

2) Department stores: Macy's sales DOWN 6.1 percent vs. expectations of down 1.3 percent, though they reiterated fourth quarter guidance. Saks down 26 percent vs. expectations of down 19 percent (ugh!). But Nordstrom was up 2.2 percent, better than expected.

3) BJ's Wholesale and Costco were soft (Costco up 6 percent vs. est. of up 8.1 percent).

4) Walgreens up 3.9 percent vs. est. of up 5.7 percent.

Racking Up Those Retailers


1) Bank of America's up 5 percent pre-open on its surprise announcement after the close yesterday that it would repay the entire $45 billion in TARP money. The bank will put up $26.2 billion in cash and sell up to $18.8 billion in convertibles.

European banks like Barclays , UBS, and Deutsche Bank all up 2 to 3 percent.

2) Toll Brothers falls 2.5 percent after reporting a wider Q4 loss, largely due to inventory writedowns. Revenues fell 30 percent, a bit better than expected. Some good news though: net signed contracts rose 42 percent from the year ago quarter, while the homebuilder's cancellation rate was at 6.9 percent - "inline with pre-downturn historical averages."

3) Japan's Nikkei up 3.8 percent, biggest one-day move since May, as the yen declines 3 days in a row. Terrific rally here; with Nikkei up about 10 percent in the last 4 trading sessions.

4) The ECB left rates unchanged as expected. 



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