I Forgot About Retail

When I discussed the economic calender for the week on Monday, I really forgot about retail sales numbers also due out on Friday morning. After some thought and after looking out the window at the weather, I suddenly realized that the numbers for last month will probably be horrible. Whether all this potential bad news is priced into retail stocks is unclear, but my bigger fear is that traders will try to read into consumer strength from retail (which I think may be overblown).

I know that the Mid-Atlantic has not received one Fall day this year yet with every day so far being sunny with temperatures in the 80's. With no rain to draw crowds to the mall and no colder weather to sell a sweater, most retail outlets in the region have to be suffering. The consumer is not dead, just distracted.

Yesterday, I talked with someone in Oklahoma that had the opposite going on (nothing but rain). Maybe things will even out more than I fear, but I keep thinking that there are a lot more consumers in the Mid-Atlantic than Oklahoma.

The only retail stock that I own is UA and I bought UA because I felt that the stock has been suffering from the sector's problems unfairly and that sports apparel may be the exception to the trend. Especially with UA being a hot brand. We shall certainly see at earnings, but I am optimistic and currently up on my UA holdings this week.

As for Retail Sales reports on Friday, they may cause the market to consolidate. I may hedge on Thursday night a little to protect what has been an outstanding run for me over the last 55 days.