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The Business Press Maven -- acting as his alter ego, the mild-mannered reporter Marek Fuchs -- spent yesterday
reporting on lobstermen off the coast of northeast Maine. As I was getting increasingly seasick, caught blind in a roll of fog, I was thinking that these guys can legitimately credit or blame weather for bad sales, marking about the first time I've ever bought the weather excuse.
discussed before, the business media always buy any weather excuse from (indoor) retailers. However, the most remarkable thing about all the contradictory coverage we've seen about June sales is that weather confusion was not part of it.
So what went wrong, and where's the truth? I'll give you a hint: Like last time, it has something to do with
-- but for the opposite reason.
First, let's review how the coverage of the same numbers lurched this way and that. Ugh, talk about seasick.
provides a good representation of the happy-faced coverage, at least in its headline: "Retail Sales Are Better Than Analysts Expected."
, you don't get seasick until the lead, confused little wavelet that it is: "Retailers, including the industry leader, Wal-Mart Stores, yesterday reported June sales that topped Wall Street's lowered expectations."
So all those retailers had lowered expectations? I was a little confused. When the second sentence told me that Wal-Mart had confirmed second-quarter earnings estimates (uh, that's good, not "lowered," right?), I ran directly for the side of the boat.
Barely recovered, I saw that
The Financial Times
went with "U.S. retail's bright spots"
as a headline and a lead that started with a laundry list of economic challenges -- from mortgage meltdowns to Midwest floods -- that U.S. retailers, by its way of thinking, surmounted. Then the rest of the article was doom and gloom, a rogue wave considering the headline and lead.
The Wall Street Journal
took hedging and
turned it into an unfortunate weather metaphor in the headline: "Retail Had a Partly Sunny June."
was a bit sunnier than "partly" in its lead, but it credited discounts. Saying that retailers did well, but primarily because of discounts, is like reciting the old saw about a girl having a good personality. Besides, forget sunny -- it was more like party in the lead: "Retailers rang up modest sales gains for June, confirming that shoppers are hunting for bargains amid a weak housing market that is expected to persist in coming months."
I wanted to jump overboard, but the sun was double bright, reflecting off the water, in an
lead about how Wall Street "soared" to new records, thanks to bright spots among (getting ready to be seasick) "generally sluggish retail sales."
So what's going on here? Why are the business media confusing investors more than usual about retail sales, while weather, the unspooling rope that usually grabs them by the ankle and drags them into the deep, is not even an issue?
Wal-Mart. Dudes, in May I told you,
in an article called "Media Sees 12 Sides to the Retail Number," why the media were making us seasick with
month's numbers. Wal-Mart, which used to be representative of the entire sector, now has specific issues. In May, it was big and bad enough to be a drag. That one retailer -- the one to which all used to look for their accurate indication -- could do this was what was making coverage worse than usual.
And in June -- irony of all ironies -- the opposite happened! This time, Wal-Mart did better than most, but take it out of the equation, and sales look worse. This makes it more difficult to detect an easy pattern -- and it's why the business media have been bobbing this way and that on the issue the past two months.
Hey, if you think retail coverage makes us seasick, try sailing over coverage about whether
The Sunday Times
New York Times
said over the weekend that a sale was under consideration, something
said too, before
pointing out in the second sentence that, um, talks were so early that the company hadn't even hired financial advisers yet. The act of hiring financial advisers is often entry-level when it comes to any sort of merger or division sale, so you wonder why it's even written about.
wrote about it too, but only to say that Ford ain't interested in selling Volvo.
In a situation like this, savvy investors, as always, need to be aware that they shouldn't rely on one media outlet. And if anything ever happens, it does not appear to be imminent. You wouldn't know it from all the excited coverage lurching this way and that, making The Business Press Maven seasick all over again.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;
to send him an email.