On Thursday August 6 retailers will report same-store sales for July. The numbers are likely to be just more of the same ugly digits reported in June. Bad weather hasn’t helped. Labor Day doesn’t come until Septemvber 7 this year, delaying the back to school shopping of even the earliest of early birds.
Oh, and then there’s that recession thing going on.
Goldman Sachs is projecting that comparable sales will fall about 5.5% from July 2008. (All these numbers now exclude Wal-Mart, which has stopped reporting monthly numbers.) That would keep up the string of 4% to 5.5% declines that now goes back to December.
Of course, retailers have been bringing in their estimates for sales growth month after month. So the real question for investors is whether or not retail companies will miss already low projections. June was grim on this front with fifteen companies missing sales estimates.
With everyone expecting these numbers to be terrible, only the worst misses will significantly hurt retailers’ shars. Wall Steet analysts–that is those not on the beach already–will be looking ahead to the August and September back to school sales numbers anyway.
I’ll have another update on China soon. (Last one was on 7/30–scroll back in the blog to find it.) I’d agree with DJ–I just don’t see the 60th anniversary providing much real kick to the Chinese economy. Yes, I think it’s one of the reasons that China is cooking its economic data even more than usual lately. Got to get that GDP growth up before the celebrations. But the actual spending for the celebration is much, much less than for the Beijing Olympics.
I cannot imagine for a minute that China will spend very much on an anniversary that only people in china will see as opposed to the whole world watching (The Olympics) if commodities “crash it will be a result of the stock piling that has been going on, but even that may last for a bit, as it may be a result of the same speculators in China buying and hording hoping the spot price keeps going up… Kind of like the tail waging the dog, hard nut to crack that China…
I expect a 15 – 28% decline accross the board (copper, iron ore and the like) sometime mid to late next year when the reality of “Wanna bet the mortgage crisis is over?” sets in…
Sometime in late 2011, early to mid 2012 might see real demand pick up marginally, untill then, I’m afraid we may see lots of run ups, and fall downs. . .
Jim,
Can you provide some update on China?
I do not know why nobody is paying attention to it, but this October 1 is a very BIG day for China. It is the 60-th anniversary of the PRC. I am not surprised that China is now buy commodities like crazy – they have to be ready for this big day, as they were preparing themselves for the last year Olympic Games.
Do you expect commodity prices crashing this year the same way they did last year just after the Games?