The retail woes are of course just one sign in an ever increasing list of signs that the economy is by no means ticking along and that the markets aren't ready for the Fed to take off the quantitative easing training wheels from the economy.
Yellen and her Fed cronies and their MSM talking head puppets can crow all they want about the state of the American economy, but the truth (as always) is in the pudding. This time that pudding is retail earnings, and the number aren't pretty. Staples posted first quarter adjusted earnings 3 cents per share below expectations, causing their stocks to tumble 13% to $11.64. Urban Outfitters was off 7.8% to $33.34 after missing a 0.3% sales growth expectation.
Dick's Sporting Goods Inc., meanwhile, suffered its worst intraday drop since 2008, off 17% at one point and ending the day down 7.2% to $54.20 after posting anemic golfing and hunting gear sales. As MarketWatch is pointing out “Black Friday would have been the perfect time to sell retail stocks” as the SDPR S&P Retail ETF is down 7.6% from November 29th when it hit its all-time intraday trading high.
The retail woes are of course just one sign in an ever increasing list of signs that the economy is by no means ticking along and that the markets aren't ready for the Fed to take off the quantitative easing training wheels from the economy. Add to that such stunning factoids as GM's record breaking 13.6 million domestic recalls so far this year, meaning that they have now recalled substantially more cars than they sold in the entirety of 2013 (9.7 million). You know it's bad when Bloomberg is quoting investment analysts like Mark Luschini at Janney Montgomery Scott LLC admitting that without any good US economic news on the horizon “we're going to be in this trading range for several months.” But then again, in a market environment that has been so dominated by the Fed for so long, who can predict what Fed intervention will produce what effect on the markets? As even Deutsche Bank's Jim Reid now tentatively admits: “Perhaps the Fed and other central banks are controlling the market too much these days with their guidance.” (Gee, you think?)
In Asia, meanwhile, markets are mostly up on a Nikkei rally on Tuesday that broke a four day losing streak. The good news buoying Japanese markets? A survey conducted by Reuters that shows Japanese businesses believe sales—which have fallen off a cliff as expected after April's tax hike—will recover by the end of the year. Whoopee. The BOJ, meanwhile is currently finishing up its two day policy meeting and is expected to announce absolutely nothing (no change in policy) later today. Thai markets, on the other hand, are significantly down on the announcement that the military has declared martial law.
First quarter results from the World Gold Council suggests that last year's record sales of physical gold is down signficantly so far this year. This trend is led by the world's two largest consumer markets, China and India, which were down 18% and 25% respectively in the first quarter. Physical sales are also down in Turkey (42%) and Thailand (56%). Overall gold consumption remained steady at 1074.5 tonnes on the quarter, however, on news that ETF outflows, which hit a record level last year, have subsided.