Retailers Not Selling Real Growth
The buyers are demanding growth, but not just any growth. They want real growth, top-line growth. They aren't buying the manufactured earnings-per-share numbers from the companies that have low top-line numbers. They want Facebook
What else do the buyers want? They prefer industrials to the consumer stocks, that's for certain. With the breakdown of the retail ETF, we are seeing real question marks, major ones, about the whole notion of shopping. Sure, there are a couple of bright spots: Costco
But for the most part, retail, including Wal-Mart
There's no doubt that the weather has been a huge bear. I keep thinking back to what Farooq Kathwari, the chief executive officer of Ethan Allen
And then there's the federal government's contribution to the retail morass. While I am no fan of Wal-Mart's execution, its mention of the weather and the cutback in food stamps resonates. Surely the government shutdown didn't help. It looks to me that the federal government directly impeded business and employment with its closing, and the group is bearing the brunt of it. Let's not forget that the U.S. remains dramatically overstored, and this moment, oddly, after the Great Recession, is when Sears
Retail is a dark hole, and I don't want to crawl into it.
You would think that the hot money would gravitate to the consumer packaged goods with their higher yields, but I think people are worried about their emerging-market growth stories, now that emerging markets are in free fall. The yields aren't great enough yet, unlike the real estate investment trusts, which bottomed when rates topped out and are now coming back furiously.