Consumer & Retail
· Retail/Discretionary shares underperforming the tape as eco datapoints continue to come in negatively inc. U. of Michigan Confidence, ECRI weekly leading index, retail sales leading to negative revisions to GDP forecasts and negative sentiment towards retail.
· Few stock specific comments to note for the group as the weakness is wide-spread across the group. Dollars Stores remain an outperformer as the unemployment benefits extension grinds closer to passage and a defensive rotation. Specialty Retail and Hardlines underperforming with both groups dn 3-5% across the board. Auto space is weak despite a slew of positive inc. - 1) positive revisions by CSM to its European production forecast and 2) upside preannouncement by DAI for Q2. GPC shares are trading up after beating for the Q and raising guidance on the CC. AN and GPI are outperforming in the Dealerships after sell-side upgrades.
· Staples space also weak across the board but holding in better than the broader tape ahead of earnings next week. ADM outperforming after US House lawmakers yesterday proposed cutting the federal tax credit for corn-based ethanol but keeping it in place and shares were upgraded this morning. PM shares outperformed peers most of the morning after Japan Tobacco received approval to take a price increase (while PM already received approval, they were unable to take an increase given's JT's large share until JT takes price). SBUX shares are dn 2%, inline w/the group, after outperforming early on comments from the CEO in a Reuters interview last night that traffic in Q3 was positive and that US & Europe have not worsened in recent weeks.
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