Stock Market New: Retail Stocks Struggle
With an economic slowdown in place (some economists are going whole-hog and calling it a recession), and with consumer confidence lagging, retail stocks are struggling on the market. MarketWatch reports on the recent consumer confidence numbers:
Earlier this week, the Conference Board reported consumer confidence was at its lowest level since the Iraq War began in 2003, while the Case-Shiller home price index showed U.S. housing prices in 20 major cities declined for the 18th month in a row.
Retail stocks are having issues because they didn’t have a good winter season, and the recent gas prices have been cutting into family budgets. Not only that, but gas prices also affect food prices (transportation costs have to be figured in) — and that means grocery shopping costs more, too. And don’t forget all the re-setting mortgage payments that have many scrambling to give their budgets an overhaul.
All of this means that many Americans just don’t have the money to frequent retail stores like J.C. Penney (JCP), Nordstrom (JWN), Macy’s (M) and Saks (SKS). In fact, all of these share prices are falling this morning on the stock market, although today JCP is getting the worst of it due to its first-quarter forecast.
As for investing in retail stocks, it may not be a bad time to go bargain hunting. I’m not sure how much the expected tax rebates will help (I have a feeling a lot of it will go toward staying afloat), but in the long run these stocks tend to recover — as long as the company doesn’t completely fold.
Look for retail stocks that are strong in fundamentals, and that are likely to make a comeback when the economy improves and Americans are spending money on non-essentials again.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional.
Tags: stock market news, stock market, stock market blog, retail stocks,
strong fundamentals, JC Penney JCP, consumer confidence
