Is the retail sector of the stock market overbought? That is to say, were investors expecting a bigger Christmas rush during this 2009 season? Did they pump up the retail stocks in advance thinking that this year the consumers and customers would come back and spend, after having been cooped up for well over a year, watching their pennies?
Apparently, the Christmas retail sales are not completely down and out, but they certainly are breaking any speed records, and no one is surprised with the results so far. Indeed, we might expect a little bit of sell off in the retail sector due to the underwhelming sales. Black Friday was not quite as spectacular as many had hoped for, although similar to what was expected, and the equivalent online retail sales were decent, but they were not all that great.
So, one has to ask has the consumer completely done a 180 on their buying behavior? It appears so, and it seems that many people are just not out shopping like they used to; have they forgotten how? Or are more people laid off, and have the credit card companies tightened so much, that the consumers are without the spendable income that they are used to?
In other words, it could be a combination of factors of a changing buying behavior, a paradigm shift in savings ratios, more people laid-off with no income, and all the credit card companies tightening their belt, and limiting balances. If this is the case, we should not expect to have a last minute rush in the 2009 Christmas retail season. Therefore, we should not expect the retail stock prices to be doing back flips. Indeed, I hope you'll please consider all this.
No comments:
Post a Comment