Every day it seems as though the S&P 500 makes a new high. This strong performance over the past year is creating complacency, as more retail investors are piling into the market. However, I would certainly urge caution, especially for any new capital being put to work at these lofty levels. With earnings season upon us, we’ve already seen several sectors in the S&P 500 get hit significantly, especially retail stocks. We keep hearing about resilience among Americans, but consumer sentiment is not as strong as many analysts believe. This is why I wasn’t surprised when retailers disappointed. One of ... Read More

One of the more common themes that I keep reading about these days is the strength of U.S. economic growth. It’s important to get at least some understanding of the potential for economic growth, as this will impact your investment strategy. Recent data is definitely making me ask the question: just how strong is the level of economic growth in America? We all know that this holiday season was much weaker than expected for retail companies. Considering that consumer spending fuels the majority of economic growth in America, this is certainly not a positive environment for that sector—but that shouldn’t ... Read More

We received great news last week after the reporting of strong jobs numbers in December that capped off a good year in which the country created more than 2.5 million jobs. In December, 252,000 new jobs were created, driving the unemployment rate down to a pre-recession low of 5.6%. The numbers for new jobs created in October and November were also revised higher. With gross domestic product (GDP) growth at an annualized five percent in the third quarter, there is optimism jobs will continue to be added at the current rate for this year. And as the jobs market improves, the positive action will translate into added confidence for workers and spending. In ... Read More

The retail sector is hurting at this time from the discounters to the luxury brands, with just a few exceptions. Even the dollar stores are facing slower growth. Yet with the sector down, it’s time to look at picking up some of the damaged retail stocks as an investment opportunity. A retailer that I feel has declined to an attractive level as an investment opportunity is small-cap Texas-based Stage Stores, Inc. (NYSE/SSI). A seller of reasonably priced brand and private-label apparel, accessories, cosmetics, and footwear to women, men, and kids, Sta ... Read More

Consumer spending is critical when it comes to growth of the U.S. economy. It makes up a significant portion of the U.S. gross domestic product (GDP)—about 70%. So, if consumer spending declines even by a little, it can really impact the trajectory of the U.S. economy. Since late last year, there’s growing evidence that suggests consumer spending is in jeopardy. The economic data that tells the level of enthusiasm among American consumers is flashing warning signs. Investors who own retail stocks need to be very careful. For example, retail sales in the U.S. ec ... Read More

It might not be as flashy as precious metals or the biotech industry, but the $27.0-billion U.S. yoga industry has some pretty strong numbers and corresponding retail stocks. Over the last year, 15 million people regularly participated in yoga here in the United States, spending more than $27.0 billion on yoga products. Over the last five years, spending on yoga products has soared 87%. And the average annual increase of the number of people who practice yoga is expanding at a rate of 20%. (Source: “Yoga Statistics,” StatisticBrain.com, July 27, 2013.) Furthermore, almost three-q ... Read More

While many retailers in the United States might be having visions of sugar plums, a lot will be left holding a chunk of coal. And in spite of the economic pressures facing American retail stocks, this piece of coal will not turn into a diamond. Even though the U.S. economy is reportedly on stronger footing, you wouldn’t be able to tell by the number of people out shopping. Traffic to U.S. retail stores is expected to slip 1.4% this November and December. In the last two months of 2012, traffic increased by 2.5% after fallin ... Read More