You can tell a lot about the pulse of the economy by examining the retail sales and restaurant sector. When people are working and making money, they tend to be more confident and want to spend, especially non-discretionary spending.
One of the most closely watched parts of the global financial system is the Chinese economy. I don’t need to tell you that the economic recovery in America and the rest of the world is quite sluggish. Many had hoped that China could help propel the global economy higher; however, there are now concerns that this might not occur.
With the market hitting all-time highs, many investors are wondering how investor sentiment can be so positive when job creation is still not as strong as it should be. This divergence between the financial markets and the real economy cannot last forever.
When interest rates are as low as they are and consumers begin to hold back on their spending, you have to wonder about the prospects for the retail sector going forward.With the higher taxes on those earning over $400,000 and other tax increases as a result of the sequestration, we may be seeing some evidence of reduced spending.
I recently discussed the upcoming key holiday shopping season that officially begins with the critical Black Friday on November 23 and its importance to the retail sector.
Commonly advertised as a “stock to watch for” over recent weeks, Shoe Carnival (NASDAQ: SCVL) proved its worth today as it reported decent 4Q earnings, great full year results and projected an outstanding outlook for 1Q12. As a result, the stock peaked at a seven month high today, up $3.28.
A common view from pundits on the strength in retail sales on Black Friday and Cyber Monday is much of the increase represented consumers buying forward. In other words, the common take on the strong sales report was it likely won't continue into December.
