Yesterday we highlighted that Sony had disappointed investors with weak earnings and lowered guidance. Today the stock is down 11.7% and the chart looks about as ugly as they get. Below we show the absolute price point & figure chart in USD.
US homebuilders are back under pressure today as fears over Fed tapering are renewed. Our relative strength point and figure charts show a group that has rolled over and is in the early stages of a downturn. It is quite possible the homebuilders retrace the entire move off October 2011 lows. Charts are below.
We began opining on the deflationary impacts of Currency Wars back in January and some of those postulations are now coming to fruition – the latest being that the South Korean CPI today hit a level not seen since the aftermath of the Asian financial crisis.
The taper trade appears to be back on this week. Some of the basic symptoms of this trade are: 1) higher interest rates, 2) higher US dollar, 3) lower gold and 4) weakening stocks. Charts below showing the last 10 days of activity reveal this sequence.
While Inditex fell below long-term support earlier this year, the stock price has managed to retrace much of that move down:Meanwhile, retail sales posted a yearly gain for the first time since 2010:
Sony reported lower than expected sales and EPS estimates and lowered its full year profit guidance yesterday, serving as a stark reminder that Abenomincs is hardly a panacea for Japan’s struggling consumer electronics industry.
Per some of our previous posts, it is getting harder and harder to find interesting large-cap consumer discretionary stocks. Many of the well known retail concepts like Target or Nordstrom are breaking down, while some of the luxury names, like Coach or Ralph Lauren are locked in persistent declines.
There doesn’t seem to be a trend in the US economic releases recently. In the past week we have had weaker housing data (Pending Home Sales), an ok production data point (Industrial Production), below consensus employment report (ADP), a weaker regional survey (Dallas Fed), and now today a blow-out regional survey (Chicago PMI).
The Treasury Department reported that in September the government had a surplus of approximately $75 billion. The budget deficit as a percent of GDP has basically halved since the end of 2011.
Coach and Ralph Lauren are two US luxury retail stocks that are currently out of fashion with investors. Coach has been in a persistent downtrend since the beginning of 2012, and it has accelerated on the downside so far in 2013.