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The Wall Street Greek blog is the sexy & syndicated financial securities markets publication of former Senior Equity Analyst Markos N. Kaminis. Our stock market blog reaches reputable publishers & private networks and is an unbiased, independent Wall Street research resource on the economy, stocks, gold & currency, energy & oil, real estate and more. Wall Street & Greece should be as honest, dependable and passionate as The Greek.


Seeking Alpha

Wednesday, December 26, 2007

Morning Coffee: Gift Buying Softness



(Stocks in this article: NYSE: SPY, NYSE: DIA, Nasdaq: QQQQ, NYSE: TM, NYSE: GM, Nasdaq: COST, NYSE: TGT, Nasdaq: AMZN, NYSE: MA, NYSE: BRK.A)

Welcome back folks. Hope your holiday passed pleasantly, and if it did not, we wish you God's blessing in the year to come.

Happy Holiday Shopping?

This morning, the big question to be answered is how did the holiday shopping go? Did consumers make a go of it or what? Well, the International Council of Shopping Centers posted weekly same-store sales data showing a 2.8% year-to-year increase for the period ended December 22nd. Clearly, the next few days that followed were significant as well. Also, according to ShopperTrak RCT Corp., 16% of holiday sales occur in the week after Christmas. Gift card sales are expected to have risen 42% this year, according to the National Retail Federation, and could prove an important mover of inventory over the weeks to come.

Remember, the population and the economy naturally grows, especially as American longevity extends. So, the deceleration of growth rates is concerning. Mastercard (NYSE: MA) put out an interesting report this morning that noted a 2.4% increase in spending from Thanksgiving to Christmas, excluding gasoline and auto sales. This represents a sharply lower growth rate than last year. Including gas and autos, growth was down to 3.6% from 6.6% a year ago. This news and a late Christmas Eve warning from Target (NYSE: TGT) has the retail sector lower today. Mastercard noted strength in luxury goods and electronic commerce purchases, which coincides with our thoughts about online shopping.

Oil Trade Overdone

Oil is rising upwards of $94 today on new Turkish bombardment of Kurdish positions. 1.9 million barrels a day were shipped out of Iraq in September, which holds the world's third largest oil reserves. Iraq's northern pipeline through Turkey is an important distribution channel, but we would not expect any disruption to shipping to be an ongoing problem if it occurred. There's no surer way to bring the U.S. against Kurdish PKK members in a more direct manner, and Turkey, the country with the most to gain from such an effort, also has much to lose from it. Turkey is content handling the PKK on its own. Iranian meddling is not beyond possibility though. Yet, in the whole scheme of things, this looks like a short-term driver of oil, and we expect the smart way to play this is to use the price strength to take short positions.

October Housing Prices Tank Further

S&P Case Shiller Produced its housing price index for October, showing a 6.7% drop and marking the 10th consecutive such decline. Until inventory is worked down, the housing market is increasingly shifting to a buyers market, but we still have a ways to go. Government efforts to mitigate foreclosures should help some, but we continue to expect foreclosures to run aplenty in '08. However, the drastic increases in year over year figures should dissipate significantly as we have lapped major change.



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posted by The Greek | 11:00 AM

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