Put on that retail stock trade: Awaiting for a Trump tweet on this one. Retail sales rose at their best pace since 2011, according to new data released on Tuesday. With the stock market hot, wages on the rise and people finding it easier to job hop it looks like spending on an extra gift or five was the norm this holiday season. From the various stores I visited Super Saturday, it was apparent that inventory was lean (a good thing) across the apparel space and folks were out there to score some more deals after spending freely on Black Friday. Retail stocks have started to price in a merry fourth quarter. Since Black Friday, Walmart (WMT) - Get Report , Target (TGT) - Get Report , Nordstrom (JWN) - Get Report , Costco (COST) - Get Report and Macy's (M) - Get Report have notched an average share price gain of 12%. Struggling J.C. Penney (JCP) - Get Report has seen its stock drop 4.3%. Surprise move of this period: Amazon (AMZN) - Get Report , whose stock has dived 3.5%. This would be a good week to put on a retail trade ahead of possible positive fourth quarter earnings pre-announcements in early January. Retailers LOVE sharing upbeat news, especially after 10 years of getting killed by Amazon.
The bad Apple news is growing:Last week I called out one firm's projection for a sharp fall in demand for the Apple (AAPL) - Get Report iPhone X in the first quarter as a risk worth watching on Apple's hot stock. Now, the bulls may want to pay greater attention. Sinolink Securities said in a new report Monday that iPhone X shipments in the first quarter may be a whopping 10 million below their prior estimate. Both reports cite the iPhone X's $1,000 price tag as stunting demand this holiday season. Call me superstitious, but when two firms come out with such striking projection cuts it's often a sign of bad news ahead. I wouldn't be surprised to see the larger banks cut iPhone projections when their analysts get back to work next week. So much for Apple to a $1 trillion valuation by the second week in January...
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One interesting stat: Coming into work on Wall Street today, it was as empty as most Sears (SHLD) stores this past holiday season. In other words, it will be a slow week for Wall Street ahead of the New Year. Here is a tidy stat as you evaluate your portfolio while sitting at home. Despite the Dow's 5% surge over the last month on the back of tax law optimism, Dow component General Electric's (GE) - Get Report shares have fallen 3.8%. The fact GE's beat up stock (down 44% year to date) has been unable to muster a comeback as the rest of the market has rallied underscores what is likely to be a challenging front half of 2018 for the company. At the very least, the performance should have every GE investor wondering if all the bad news is well-known at this point.
My Holiday Ride
It wouldn't be a holiday season for me without a supercar to review. This Christmas brought the new 707 horsepower Jeep Trackhawk (below) from the folks over at Fiat Chrysler (FCAU) - Get Report . For close to $100,000, you can be the coolest dad in school driving around in a Jeep that goes 0 to 60 mph in 3.5 seconds. Credit that face-ripping speed to the Jeep sporting the Dodge Hellcat engine under the hood.
Is this SUV practical? No clue. I asked my younger brother (has two young kids under the age of 2) if he would buy one, and said his wife probably wouldn't let him. I get it. But damn, 707 horsepower!
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