What can be expected as earnings season begins for the retailers? It was a rough start, with lower-than-expected numbers released yesterday. But with the downward movement of oil and the strengthening US dollar, retail may see an upswing.
Wal-mart will announce earnings on Thursday Aug 14, Target on Aug 19. Even with yesterday's disappointing retail numbers, Target is still higher for the week. Oil's drop may spur the consumer to spend more as back-to-school season progresses. Home Depot is popping as Beazer Homes beats on 3rd quarter revenue.
Macke says, "It's all about the reaction." No one expects good numbers from retail at the moment. As a long holder, he is even disturbed by Wal-mart's recent technicals. He feels more positive about Costco because it was more transparent with its advance warnings of sales numbers. As far as Target: "Lousy numbers... [I'm] deeply concerned."
Karen bought Abercrombie & Fitch today because she still feels its valuation is too low. It will be reporting earnings next week.
Adami is bullish on Home Depot, which was up 8% today and closed at 26.32, which he feels is still good valuation. Definitely buy the dips when you can, he says.
The Retail HOLDRs ETF surged 4% today as the oil slide continues, Macke points out. "The mantra all year has been sell the rips."
Karabell argues that precisely because expectations are so low, that some of these retail stocks that have been beaten so low may surprise with better-than-expected earnings, even if by a small amount.
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On Aug 8 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (WMT) (COST) (DIS) (MSFT) (EMC); Adami Owns (AGU) (C) (BTU) (GS) (INTC) (MSFT) (NUE); Karabell Owns (FMCN) (AAPL) (AGU) (GOOG) (JPM) (GLD) (SLB); Finerman's Firm Is Short (IYR) (IJR) (MDY) (SPY) (IWM) (XLF) (BBT) (COF); Finerman's Firm And Finerman Own (C) Leaps; Finerman Owns (GS); Finerman's Firm Owns (MSFT) (SUN) (TSO) (VLO); Finerman's Firm Owns (ANF) And (ANF) Call Spreads; Gartman Is Short (TAP) (TM) (MA); Gartman Owns (AFFY) (FLO) (PLL) (IBM) (HOG) (SDS); Gartman Owns (ANDE) And Is Short (ADM); Gartman Owns (QQQQ) And Is Short (TLT); CIBC Gartman Index Owns Copper, Aluminum, Wheat, Corn, Soybean, Natural Gas, 10yr Canadian Bond, Australian Dollar; CIBC Gartman Index Is Short Crude Oil, Sugar, Euro; Roger Neshem Has A Business Relationship With Monsanto; Roger Neshem Owns (DE). PRE-PRODUCED: Finerman Owned (CSCO) On 7/14/08, Finerman's Firm Owned (ANF) Call Spreads On 8/5/08, 8/6/08, Macke Owned (INTC) On 7/10/08.