Retail is seeing a perfect storm, but is the consumer really that bad off?

The silhouette of a customer is seen pushing a cart at a Costco Wholesale store in Naperville, Illinois.
Daniel Acker | Bloomberg | Getty Images
The silhouette of a customer is seen pushing a cart at a Costco Wholesale store in Naperville, Illinois.

Considering everyone is talking about how well the consumer is doing, the news on Tuesday reflects a perfect little storm for consumer names:

Retailers: Disappointing auto sales from Ford, GM and Fiat Chrysler are weighing on the retailers, particularly department stores, where Dillard's, Kohl's, Macy's and Nordstrom are down 5 to 7 percent

Airlines: Most airlines are down 3 to 6 percent as Delta Air Lines said its unit revenue fell 7 percent in July.

Restaurants: Texas Roadhouse reported a beat, and while same-store sales were up a solid 4.5 percent, it was only up 2 percent in June and 3.7 percent in July. This is a big momentum stock — up 30 percent for the year — so despite a solid report investors took profits and it's down 12 percent midday. Other restaurants such as Brinker, Ruth's and Cheesesteak Factory are down mid-single digits.

Cruise ships: Royal Caribbean Cruises cut its outlook on higher fuel costs and negative currency (primarily weakness in the British pound thanks to Brexit).

Is the consumer really weakening? Not necessarily. Royal Caribbean said bookings remain strong. And in airlines and autos, much of the damage from those two groups has been self-inflicted: Auto companies have been providing outsized incentives for months, and airline companies have added too much capacity.

Finally, bear in mind that some of this reaction may be reversion to the mean. Retailers have been notable outperformers recently. Since the Brexit bottom on June 27, the SPDR S&P Retail ETF, a basket of the larger retailers, was up 12 percent, while the S&P was up only 8 percent.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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