The Treasury Department reported that in September the government had a surplus of approximately $75 billion. The budget deficit as a percent of GDP has basically halved since the end of 2011.
Coach and Ralph Lauren are two US luxury retail stocks that are currently out of fashion with investors. Coach has been in a persistent downtrend since the beginning of 2012, and it has accelerated on the downside so far in 2013.
LinkedIn sold off hard today (-9.3%) as management guided slightly lower than analyst’s were expecting for the final three months of the year. LinkedIn has been on a tear this year. Before the sell off today, LNKD was up 136% and had outperformed the MSCI World Index by 90% over the past year.
Two of the largest expenses for consumers are housing and gasoline. The gain in house prices suggest that the owner’s equivalent rent portion of CPI will rise in the coming months. Meanwhile, retail gasoline prices suggests that the gasoline component of CPI will fall.
As we mentioned a couple of weeks ago, most European equity indices are in positive territory this year (lead by the peripherals).
The overall consumer confidence index fell from 80.2 to 71.2 in October due mainly to the government shutdown this past month. The consumer confidence survey also takes the temperature of consumers in different income brackets. What caught our eye was the difference in confidence between the richest and poorest Americans.
Getting timely data on house prices is tricky. The Case-Shiller Home Price Index tracks 20 cities but with a two month time lag. The latest data (August) shows a couple of interesting points emerging about the national housing market.
Retail sales were reported in the US today +3.23% over the last year, the weakest year over year reading since the recovery began. Weakening retail performance is weighing on several US retail giants like Target, Nordtsrom and Family Dollar (charts below).
Cummins is leading the construction and farm machinery stocks down this morning after reporting revenues roughly $100 million under estimates.
Using our relative strength point and figure charts, we are always on the look out for stocks with deteriorating momentum. Through years of managing portfolios, we have learned the hard way that 80% of portfolio problems will come from 20% of the stocks. The following are five stocks to be avoided in Europe right now.