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Afternoon Note

Retailers to the Rescue
By Charles Payne, CEO & Principal Analyst
4/6/2017 1:05 PM

The market is meandering but holding on to its gains, a sign of a moral victory after yesterday’s dramatic reversal that wiped out 200 Dow points in a matter of minutes.  In fact, the last hour of this session could go either way, and for now, the closing bias is to the downside.

Don’t Bury Me

The most compelling action is in consumer discretionary as brick and mortar stores are having a grand session.  Leading the pack is Costco (COST), which is in a league by itself, posting market sales metrics that bode very well for quarter results. 

March Performance

Revenue

Same Store

United States

+7%

+6%

Canada

+3%

+3%

International

+4%

+6%

 

The top performing names in consumer discretionary have had many difficult issues lately, but are bouncing back nicely today.

  • L – Brands (LB) stock looks as hip as its website, filled with young models having the time of their lives.
  • Kohl’s (KSS), which I think is oversold, lost a lot of credibility from suspect guidance after Black Friday of last year.
  • Gap Stores (GPS), which at this point, probably needs a marketing campaign that says: “Not Your Father’s Gap”.

I like action, and industrial names are wondering if President Trump’s NY Times interview, where he talks about using debt to fund infrastructure, is having impact.


Comments
Charles, Dire Staits had a famous line about that L-Brands on one of their songs..........

Mike on 4/6/2017 1:22:39 PM
 

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