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April 12, 2007

Gambling with the Retailers

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During the month of March some of America’s big retailers saw a steady increase in their sales. Nordstrom, (JWN) saw same store sales rise by 15% with analysts upgrading quarterly earnings estimates. However, there is some doubt that the upcoming spring months will bring in the same sales experienced as of late. There are three main causes that could pose potential problems that include rising gas markets, higher interest rates, and an unsteady housing market. These issues come to light after statistics were released that showed the number of Americans filing for unemployment benefits rose to a two month high. It has also not been ruled out that the Fed will not impose higher taxes to curtail current inflation. It was also seen that the fact that the US experienced warmer weather during March and the earlier date of Easter this year will lessen earning reports for the month of March. Thus, although retailers may not experience significant sales declines during April it does not appear that there will be many positive surprise story’s and suggest selling short term positions in the retail industry.

Posted by jcip at April 12, 2007 09:16 PM


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