The drubbing in retail stocks is in full force. Fossil (FOSL) has lost a third of its value today alone on its earnings miss and weak revenue guidance.  The market has put all retailers on sale with huge discounts.  It’s hard to find one that isn’t down significantly.  If you like a bargain, there are many good deals brewing.

Retail sales data suggest that the consumer is still struggling and PPI indicates that inflation remains subdued and as result the Fed shouldn’t feel pressure to raise rates, just yet.  And so, the question of whether a rate hike in December actually takes places continues to plague the markets.

We got another read on the consumer with the preliminary results for November’s Michigan Consumer Sentiment, which rose to 93.1 from 90.0 in October, due mainly to a brighter outlook for the US economy.  Consumers expect larger increases in income coupled with low inflation and that has bolstered their confidence.  Some of the larger gains came from households with lower income.  This is the best inflation-adjusted income expectation in 8 years.  Contrary to retail sales, which saw a decline in automobiles, the survey showed that consumers plan on making large discretional purchase, especially automobiles.  Looks like a disconnect with what consumers are spending, how they are feeling, and what they plan to spend.  This could be a harbinger for better retail sales on the horizon.

It’s hard to find much in the green, other than pharmaceuticals and bio-techs, which are bucking the trend mainly on news that Perrigo (PRGO) rejected Mylan’s (MYL) hostile takeover bid.  MYL is actually up nicely on the news, and PRGO is down. The overall market is under pressure, and the Dow has lost about 400 points in two days.

Commodities are really feeling the pain.  Metals are getting crushed.  Aluminum and Copper prices are down 25% this year.  Gold at $1081.70 is trading at February 2010 lows. Oil has continued its slide and is down 2% today, and 5.5% this week, a two-and-a half month low. Oil stockpiles hit a record 3 billion barrels today, according to International Energy Agency (IEA), which projects further erosion in demand next year.

Natural gas is about the only winner in the energy complex.  Inventories showed another build and is well above the 5 year high.  Colder temperatures are forecasted and winter is coming, but it has been very mild so far, and the stockpiles are high.

The market is crawling off the lows. But at this point, we are going to remain on the sidelines.  Have a great weekend.