Morning Market Thoughts

by DAN Good morning. Stocks are a bit sluggish this morning, though still the indexes are remaining in their effective trading ranges. I don’t really see much in the news that’s worth commenting on this morning, though I will mention a few random thoughts.

First, tomorrow is the first Friday of the month, so we’ll be getting the official jobs numbers from the Department of Labor. While the indexes are near record levels, it’s hard to envision any aggressive buying prior to the release of this key jobs data. As such, I’d expect to see another day of consolidation. Tomorrow will be different. I think we’ll either blast through resistance, or fall back to test support.

Next, the retail sector continues to struggle and I suggest letting someone else hold these stocks. Macy’s (M) is down about 11% after announcing that they’ll be closing 68 stores. Kohl’s (KSs) is down about 15% after it cut it’s 2016 earnings outlook. The company reports earnings on February 23rd. Both of these stocks may see oversold rebounds this morning, but are not even rebounding from their morning gaps.

Last, just a quick comment about Restoration Hardware (RH). We went shopping last night at a local shopping mall and wandered through Restoration Hardware store. As I left the store, I could not remember one single item that was memorable. That’s a problem. That’s not what you’re supposed to see at Restoration Hardware. It’s supposed to have cool (and expensive) furniture that begs to be adopted and taken home. Instead, everything seemed to be square and monochromatic, which is supposed to be the current trend. That’s a problem if you’re a store that’s trying to get people from the showroom to the cash register. Also, we were the only people in the store other than the sales people, who seemed to be quite bored.

That’s about it this morning. I continue to think that the S&P is on the verge of breaking out. I just don’t think it’s gonna happen today.

See you in the forum.

–Dan

Market Update