B.I.G. Tips – CAT Sales Head South
This content is for members onlyB.I.G. Tips – Bears Outnumber Bulls 2-to-1
This content is for members onlyB.I.G. Tips – Death by Amazon – 4/16/20
Our “Death By Amazon” index was created many years ago to provide investors with a list of retailers we view as vulnerable to competition from e-commerce. In 2016, we also created our “Amazon Survivors” index which is made up of companies that look more capable of dealing with the threat from online shopping. To see how the two indices have been performing lately and view the full list of stocks that make up the indices, please read our newest report on the subject available to Bespoke Premium and Bespoke Institutional members.
To unlock our “Death By Amazon” and “Amazon Survivors” indices, login or start a two-week free trial to either Bespoke Premium or Bespoke Institutional.
It’s Earnings Season (Or Whatever it is Companies Plan to Report)
It’s that time of year again. The time when corporate America reports financial results for the prior three months. Normally, we call it earnings season, but given the fact that most of the US economy has been shut down and no timetable is set for when it re-opens, for a lot of companies out there, there really isn’t much in the way of earnings, revenues, or guidance to speak of. Instead, this reporting period will likely be a lot of companies trying to put the best spin on how much (or little) cash they have on hand to withstand the shutdown.
Besides the major banks and financials, there hasn’t been a whole lot in the way of reports to speak of, but of the results we have seen, the stock market reaction hasn’t been great as companies like Johnson & Johnson (JNJ), JP Morgan (JPM), Wells Fargo (WFC), Bank of America (BAC), and Goldman Sachs (GS) have all seen negative reactions to their reports. The only large-cap that has really reacted positively to earnings so far is UnitedHealth (UNH) which gained more than 4%. Next week, the pace of reports will pick up, but the peak period for reports won’t be for another two weeks when more than 300 companies will report in a single day.
Our quarterly preview of earnings season is extremely useful and a must-read. To see the report, sign up for a monthly Bespoke Premium membership now!
Retail Sales Chaos
Expectations for this morning’s March Retail Sales report were already low but not low enough. While economists were expecting the headline reading to fall 8.0%, the actual result was even weaker at -8.7%. On the bright side (if you can even say that) readings ex Autos and Ex Autos and Gas were both better than expected.
The overall economic impact of the COVID outbreak is obviously negative, but there have been some big winners (and even bigger losers), and this month’s Retail Sales report illustrated some of these major shifts. Looking through the various sales trends in our monthly update there were some crazy looking charts, but two that especially stood out were Clothing and Food and Beverage Stores. In the case of Clothing, its 50% decline took the monthly sales rate to the lowest level since 1995. Meanwhile, sales at Food and Beverage Stores took off. With people forgoing clothes in favor of food, no wonder everyone is looking like slobs these days!
For anyone with more than a passing interest in how the economic shutdown is impacting economic data, our monthly update on retail sales is a must-read. To see the report, sign up for a monthly Bespoke Premium membership now!