Wall Street Greek: Stock News: TARP Repayment, ICSC Report, Wholesale Trade

Visit the front page of Wall Street Greek to see our current coverage of economic reports and financial markets.

(Tickers: DIA, SPY, QQQQ, NYX, DOG, SDS, QLD, XLF, IWM, TWM, IWD, SDK, NDN, CRAI, GIGM, KFY, LAKE, MDNU, MLNK, MOV, NAV, NCS, OXM, RENT, RSC, SHFL, SINA, STRM, TLB, TITN)

Stock News

wall street the Greek economist analyst writer

In today's stock news, rumor has it the government might allow 10 banks to repay TARP funds. The stagnant market (by recent basis anyway) might have reason for enthusiasm this morning. Financial sector stocks have already returned from the dead, but at least it seems we can take them off the critical care list too. Those of you freaked about the prospect of inflation, might also consider that the banks may not need new money issuance any time soon.

The regular ICSC data was reported this morning, and still reflects stabilization in my eyes. Wholesale Trade is also due up for reporting later this AM. However, I'm throwing all this information out the window today, as I'm seeing something in the marketplace. I'm seeing doubt... in Obama, in economic prospects, in a chance for a swift recovery. This should allow for some further reflection upon valuation and some reconsideration of holdings. In other words, I see a near-term correction, or adjustment, or whatever you want to call it. So what am I saying then? I'm saying, sell in June and walk away for a little while...

ICSC Weekly Same-Store Sales Report

Reported early this morning, the weekly sales data showed a year-over-year decline of 0.8% this time around, matched with a 0.2% weekly rise. Most expert commentators are now speaking of a coming decline in consumer spending and a coinciding hit to retail, but we have been pointing to the stabilization in the weekly same-store sales figures published by the ICSC. The size and growth of our economy forces stabilization at some point, and that appears to be happening, as seen in the trend table below.

Are there significant pitfalls before us? Yes... Consumer credit continues to contract, consumer loan defaults continue to rise, and unemployment continues to deteriorate. Meanwhile, economic stabilization is seen by most economists before or around the year's end. We heard Mr. Krugman (an economist you should have heard of) this morning say the turn may be in by September.

Looking around my neighborhood (in Manhattan mind you), I see vacant commercial space after vacant commercial space, and local in-the-knows chirp to me that it's due to stubborn landlords who will not cut rental rates. For certain, there was also an excess of marginal shops that had confounded me with their existence for years. A little shake up was certain to sink the plethora of chic toy stores and overpriced designer children's clothing. The shake up we got though, did in a bunch more.

ICSC Weekly Trend

Week Ending

Weekly Change

Yearly Change

June 6

+0.2%

-0.8%

May 30

-0.6%

+0.6%

May 23

+0.8%

+0.5%

May 16

-1.2%

-0.3%

May 9

+0.3%

+0.5%

May 2

+0.3%

+0.5%

April 25

-0.7%

-1.7%

April 18

-0.4%

-0.1%

April 11

+0.8%

-0.4%

April 4

+0.6%

-0.3%

Wholesale Trade - April

Later this morning, at 10:00 a.m., look for the Commerce Department to report on Wholesale Trade. At last check, the inventory/sales balance reverted to its old ways after showing signs of stabilization. Sales fell at a faster pace than inventories last month (for March), so the important inventory-to-sales ratio took a step backwards, to 1.32, from 1.31. Sales declined by 2.4% on the wholesale level, while inventories contracted by just 1.6%. Much of this had to do with a matching reversion in durables, but rising commodity prices also took nondurables sales lower.

"This mix of messages... makes the case for a U-shaped recovery..."

This mix of messages simply evidences the fact that stabilization does not mean recovery is nearby, and it makes the case for a U-shaped recovery, over the V-shaped argument. Barron's reports the economists' consensus for Wholesale Inventory for April at -1.1%.

Other Happenings

The American Petroleum Institute will publish its weekly U.S. crude oil and fuel inventory data. Needham & Co. forgot to invite me to its fourth annual Internet & Digital Media Conference today at the New York Palace Hotel, but maybe I'll squeak my way in if I find some time.

Markets Overseas

Asia:

MSCI Asia APEX 50: -1.47%

Japan NIKKEI 225: -0.8%

Hong Kong Hang Seng: -1.07%

China CSI 300: +0.41%

India BSE SENSEX 30: +3.14%

Europe:

DJ Euro STOXX 50: +0.51%

UK FTSE 100: +0.1%

France CAC 40: +0.19%

Germany DAX: -0.03%

(Prices as of hour of publishing, which may not be the close)

Stock News

Tuesday's earnings schedule includes reports from 99 Cents Only Stores (NYSE: NDN), CRA International (Nasdaq: CRAI), GigaMedia (Nasdaq: GIGM), Korn Ferry (NYSE: KFY), Lakeland Industries (Nasdaq: LAKE), Medical Nutrition USA (Nasdaq: MDNU), ModusLink Global Solutions (Nasdaq: MLNK), Movado (NYSE: MOV), Navistar Int'l (NYSE: NAV), NCI Building Systems (NYSE: NCS), Oxford Industries (NYSE: OXM), Rentrak (Nasdaq: RENT), Rex Stores (NYSE: RSC), Shuffle Master (Nasdaq: SHFL), SINA Corp. (Nasdaq: SINA), Streamline Health Solutions (Nasdaq: STRM), Talbots (NYSE: TLB) and Titan Machinery (Nasdaq: TITN).