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AdirondackFund (< 20)

Is Macy's a Harbinger of Christmas Holiday Sales?

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November 11, 2009 – Comments (3) | RELATED TICKERS: M

Macy's is down 8 1/4 percent today to 17.85, or thereabouts, on heavy profit taking.  I checked all of the usual suspects for news and commentary, but apparently the decline has caught both Corporate and the Financial Press by surprise, and they simply haven't had time to invent the obligatory market alibi in time to ward off additional selling.  There is a rather tight horizontal neckline here at 17.85, but considering this stock was at 5-6 in March, that's a very hefty rally that's occurred without a correction.  Furthermore, on the wavecount, this would be the 3rd wave down going back to the most recent high at $20.72.

There is a story out by The Wall Street Journal which attempts a clever and well heralded alibi for the decline, but the story came out at 12:11 PM, well after the decline in shares had already begun.  This is very typical of how markets actually function as both the Corporate and Media interests are caught simply flatfooted and late in explaining events which have already occurred.

Apparently, we are to believe that our Economic recovery is going so well that Black Friday has now been turned into Black November with sales and promotions happening well before the Macy's Day Parade, which is the customary kickoff to the Holiday Shopping Season. 

For Bears that are looking for blood in the water, this is your siren call.

  http://blogs.wsj.com/economics/2009/11/11/black-friday-becomes-black-november/?mod=yahoo_hs 

3 Comments – Post Your Own

#1) On November 11, 2009 at 1:41 PM, russiangambit (29.94) wrote:

Yes, just a 300% run up since March. Well, I noticed ANN went from $2 to $12, that is 600%. There is also Talbot, Lulu and so on.

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#2) On November 11, 2009 at 2:21 PM, leohaas (93.62) wrote:

This is simply due to M not living up to the analysts' expectations for the 4th quarter. See for instance this article (there are plenty others out there, basically rehashing the same information):

"Macy's forecast same-store sales, or sales at stores open at least a year, to fall between 1 percent and 2 percent in the fourth quarter.

It also said it expects fourth-quarter earnings of $1 to $1.05 per share. Wall Street analysts had expected earnings of $1.17 per share, according Thomson Reuters I/B/E/S." 

Bottom line; Q4 earnings will be 10-15% lower than expected. The stock of any company announcing that kind of news will drop by leaps. 10% is not much at all here...

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#3) On November 11, 2009 at 4:56 PM, AdirondackFund (< 20) wrote:

@ leohass

Yeah, I saw the Reuter's article about 40 minutes after posting here at The Motley Fool.  That's why I included the time in the post, you know, just to keep the Media honest on their reporting.  Then there were the obligatory 'at-the-bell' explanations which followed at 4:06 PM.  I think the point is sort of 'chicken and egg'.  The price collapsed under heavy volume from the get go this morning and everyone in the Media was out to lunch in reporting the news.  This IS Macy's we are talking about.  The WSJ scooped everyone reporting at 12:11 PM, nearly the instant I started posting here, but they were the only one. 

If you think someone is watching, you are right.  A little spit and dribble in the direction of the Financial Media is always a good idea when they're falling down on the job, as they tend to do rather routinely, bastions of the alibi and coverup that is their purpose to serve.

Don't you just love a good Media spitball fight?

Fool on!

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