The Day Ahead: How to Celebrate Ben Bernanke Day
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I have put a great deal of thought into the outlook for the consumer for the balance of 2012, and even if the Fed eases we are on a course toward a near-term moderation in consumer spending vs. the rates seen in July and August, with a likely re-acceleration for the holidays. (Of course, a variable to that is the election outcome and language and action regarding the coming fiscal cliff). I sense there is this wave building off in the ocean -- one that would dent sentiment -- comprised of decelerating job growth, rising food prices, weakening six-month expectations on consumer confidence and the use of savings to pay down debt incurred during must-spend periods.
Taking No Prisoners this AMWeird
- Lumber prices are enough off their August peak to make you go "hmm," alongside the massive advance in homebuilder stocks.
- Department stores are showing too much inventory, especially in menswear to work and now women's wear.
- less "wowed" by price increases on merchandise; clearly cotton cost savings are being reinvested to maintain prices.
- I spotted my first Tesla charging station in an A-rated mall parking garage (yes, I have a picture, and it's on my Twitter account).
- Macy's (M) is on a renovation boom. Outside of the New York City flagship overhaul, a C-rated mall-based Macy's around my way has been completely knocked down to reopen in the fall of 2013 with a more upper-end style. Macy's Roosevelt Field is now displaying higher-end luxury shop in shops (think Louis Vuitton) upon entry, and the Bloomingdale's down the hallway is also receiving tweaks. All in all, I do wonder about holiday sales disruptions if work is not completed, if these malls are any indication of activity in other locations nationwide.
- I continue to see why my top back-to-school pick, American Eagle (AEO), announced a special dividend. I had not expected that dividend, but the company did close a lagging division and is opening stores at a slower pace, and it's a nice way to endear a new CEO to shareholders. Beyond this, American Eagle's product assortment remains the best relative to its primary competitor base.
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