Retailers Shine; Costolo's Take on Twitter; Roubini's Thoughts on Stocks

The CNBC 'Fast Money' traders dissect the latest earnings results from retailers Walmart and Dick's Sporting Goods, then hear from Nouriel Roubini and Dick Costolo.
By Bret Kenwell ,

Stocks have spent most of Tuesday in the green, although the S&P 500 ETF (SPY) - Get Report has come off its highs. Helping push stocks higher are the better-than-expected earnings results from retailers like TJX  (TJX) - Get Report and Home Depot (HD) - Get Report

ON CNBC's "Fast Money" TV show, Stephanie Link, portfolio manager at TIAA-CREF, made the case that a company like TJX -- despite comp-store sales growth of just 3% -- is more attractive than a struggling company likeMacy's (M) - Get Report .

More specifically, Link also pointed out that Home Goods, one of TJX's store brands, is doing very well with comp-store sales results of 6%. Between Home Goods and Home Depot, which reported 7.3% comp-store sales results, it's clear that decorating, remodeling and home improvement are going well. Look for that theme to continue going forward. 

Walmart (WMT) - Get Report is also trading higher on the day after its earnings results. However, Josh Brown, CEO and co-founder of Ritholtz Wealth Management, attributes the earnings beat to the incredibly low bar the company had set for itself. He was not impressed, but argued that Amazon (AMZN) - Get Report continues to put pressure on all sorts of retailers -- 40% of the retail sector is down 10% or more in the past 30 days.

That's an "alarming, sector-wide selloff," Brown said. 

One retailer not doing so hot is Dick's Sporting Goods (DKS) - Get Report , which is down 11% following a top- and bottom-line earnings miss, as well as lower-than-expected earnings results. Pete Najarian, co-founder of Optionmonster.com and Trademonster.com, is long the stock and said shares actually look attractive now, given the low valuation. 

Although "athleisure" products are selling well, the retailers aren't seeing quite as good results, Najarian said. For instance, while Nike (NKE) - Get Report and Under Armour (UA) - Get Report continue to fire on all cylinders, Foot Locker (FL) - Get Report and Dick's Sporting Goods continue to disappoint investors. 

The conversation turned more broadly to the stock market. 

Nouriel Roubini, chairman of Roubini Global Economics, appeared on the show. He said China will likely avoid a hard landing, preventing the global economy from falling into a recession. But he expects "mediocre" global and U.S. growth, which should lead to U.S. stocks barely generating single-digit returns. 

Roubini expects the current low inflation environment to last for several more years, as emerging markets and commodity prices remain under pressure. The chances of a U.S. recession are "very low," he said, so long as the Federal Reserve does not raise interest rates too fast -- which seems unlikely -- and as long as China avoids a hard landing. 

Then Dick Costolo, the former CEO of Twitter (TWTR) - Get Report , joined the show.

Costolo discussed co-founder Jack Dorsey being named CEO. Costolo -- who ran the company from 2010 to 2015 -- said Dorsey was the best fit because he has such a deep understanding of the product.

Dorsey invented Twitter, is great at listening to ideas and providing feedback, and is able to inspire the team, Costolo explained. 

There was interest in the CEO position from other candidates, and the Twitter board preferred a candidate who would be dedicated full-time to the CEO role. (Dorsey is also the CEO of Square.) But Costolo said Dorsey was simply the best fit for the job. 

Twitter reaches hundreds of millions of people and the platform is very resilient, Costolo said. It helps having other platforms too, like Vine and Periscope. Now it's up to the team to capture the value of that, he concluded. 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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