Wall Street Takes it One News Cycle at a Time
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Better than expected economic data lifted Wall Street on Thursday after a volatile week that seemed to be up and down based on the news of the hour. A report released by the Labor Department showed that the number of workers filing for initial unemployment claims fell 20,000 to 512,000 last week. Also boosting stocks Thursday were signs that companies are squeezing more efficiency from a smaller workforce. Oil, which has gone over $80 a barrel in the last weeks, slipped on Thursday on concerns that the global move towards energy conservation and other fuel sources would reduce demand significantly over the next 10 years.
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Retail numbers came out this week and showed that same store numbers for the higher priced name brands were mixed, but consumers were willing to spend. Our Bullish pick didn't get the numbers it expected and were punished for it. We think the pullback is a good entry point to this popular retailer. They are expanding their product line, remain one of the most in-demand brands for both teens and young adults, and have a strong enough balance sheet that we won’t see a clearance sale sign at their stores any time soon. The Bearish pick for this week is a media conglomerate, but the two divisions that were suppose to be the vanguard for them are the parts that may end up sinking this entertainment giant. |
 True Religion Apparel (TRLG) - For fashion forward companies there is one line that you cross that sets a tone for the demand of their product. The first time you saw DKNY, Guess and Polo inside a TJ Maxx or Marshals was the day millions of consumer knew that they could wait out the year and get the clothes at discount prices. True Religion has not sold out to the big discount department chains even after the worse environment for high end retailers in the last decade.
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 Time Warner (TWX) - Time Warner is facing problems on several fronts. The AOL business is stagnant and losing market share daily with no solutions in sight as they try to sell it off. As a cable provider, Verizon Fios is growing and seems to have more to offer consumers, which is another piece of Time Warner losing market share. The Warner Bros entertainment division seems to be their most productive arm, but not enough to offset the fading technology divisions.
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