The big low-end retail stocks like Wal-Mart and Costco are definitely holding their own. In fact, the stocks of both these big American retailers are up 12% since the beginning of September 2007.
New York, NY (PRWEB) January 29, 2008
Profit Confidential, a division of Lombardi Financial, one of the world's largest newsletter advisory companies, today warned its readers of a sudden downturn in U.S. consumers spending habits that is accelerating the pending recession.
In his report released today, Michael Lombardi states "The big low-end retail stocks like Wal-Mart and Costco are definitely holding their own. In fact, the stocks of both these big American retailers are up 12% since the beginning of September 2007."
Lombardi continues in Profit Confidential, "It is the high-end retail stocks that are getting hit the hardest," quoting the stocks of Coach (largest U.S. luxury leather handbag retailer) down 32%, Starbucks (biggest high-end coffee shop) down 29%, Whole Foods (high-end organic food store) down 15%, Tiffany & Co. (high-end jewelry retailer) down 28%... all since early September, 2007.
According to the article that appeared in the popular stock market e-letter Profit Confidential today, "What the stock charts of the retail stocks are telling us is that consumers are moving away from high-end retails store purchases, either curtailing their spending all together or moving to the low-end retail stores. This is all quite typical: At the beginning of any economic contraction, consumers first reduce their non-essential and frivolous purchases."
In the Profit Confidential article, Lombardi says, "For the economy the message from retail stocks is quite clear: Consumer spending, which accounts for roughly 70% of U.S. GDP, is in jeopardy. After having spent like "drunkards" during the real estate boom years, consumer spending is taking the same trend as housing prices, slowing down faster than most analysts and economists had predicted."
Lombardi believes as news of the recession continues to make headlines in the popular media, the psychological spending mood of consumers will continue to deteriorate, lowering earnings at most high-end retailers and bringing their stock prices down even further.
For the full report, please visit: http://www.profitconfidential.com
About Lombardi and Profit Confidential:
Profit Confidential is Lombardi Financial's free daily investment e-letter. Written by financial gurus with over 100 years of investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, other investments and the economy. Lombardi Financial is a division of Lombardi Publishing Corporation, founded in 1986, now with over one-quarter million customers in 141 countries.
For more information, visit: http://www.profitconfidential.com