After Santa


Retail stocks traded lower on Wednesday, sparked in part by a profit-warning from discount retailer Target.

Now that Christmas is over, some analysts are saying it was the worst Holiday season in years. Can you trade it?

What’s going on with Target?

Target has not had a great year, says Jeff Macke on CNBC’s “Closing Bell.” The stock peaked at $70 this summer. If you’re looking for a quick return on your dollar, Target probably isn’t for you, he adds.

Shouldn’t Target doing better, if there is weakness in the economy?

With a weaker consumer, it’s more a matter of a broad tailwind going away than anything else, says Macke. For every person who drops down into Target, there are people who drop away from them, entirely.

Personally I don’t the consumer is dead – just resting. In this environment go best of breed. I recommend Costco (COST), Macke says.

Do you see opportunity in retail in ’08?

There’s always opportunity, Macke replies. Costco (COST) carved themselves a solid niche. I see further opportunity there. I also like Activision (ATVI), Intel (INTC), and Research In Motion (RIMM). The consumer is still buying, he adds, they’re just not buying willy-nilly.