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Morning Reads on Our Radar Screen

Takeaway: A quick look at some stories on our radar screen.

Keith McCullough – CEO

Merkel romps to victory (via Reuters)

China Manufacturing Gauge Increases to Six-Month High (via Bloomberg)

Fed's Lockhart says U.S. losing some economic mojo (via Marketwatch)

Brawl, Goalie Fight Mar Leafs-Sabres Game (via ESPN)  

 

Morning Reads on Our Radar Screen - earth1

 

Darius Dale – Macro

The Sad Reality of Z.I.R.P. (via Twitter)

 

Josh Steiner – Financials

Signs of an easing of credit requirements are surfacing (via LA Times)

Metro Phoenix housing market's turnaround creates new issues (via azcentral.com)

 

Matt Hedrick – Macro

At 77 He Prepares Burgers Earning in Week His Former Hourly Wage (via Bloomberg)

Merkel Seen Neglecting German Needs With Focus on Euro (via Bloomberg)

 

Howard Penney – Restaurants

Frothy Stocks Yield More IPOs (via Restaurant Finance Monitor)

 

Tom Tobin – Healthcare

Uncovered kids still a major problem (via ModernHealthcare.com)

 

Jonathan Casteleyn – Financials

BlackRock Sees Growth Surprise as Bond Risk Slides: China Credit (via Bloomberg)


Around the Globe

Client Talking Points

CHINA

Good news out of China this weekend. September's HSBC flash purchasing managers index came in at a better than expected and expansionary 51.2.  This was also a sequential improvement from August of 50.1 and the highest reading since March. Shanghai Composite up over 1.3% this morning leading most of the major Asian indices. The set up for China gets increasingly interesting if the HSBC survey is correct and Chinese GDP is set to accelerate sequentially and exceed current consensus estimates.  

EUROPE

Economic data out of Europe this morning is largely positive.   While the Eurozone flash manufacturing PMI edged down to 51.1 in September from 51.4 in August, both the Services and Composite PMI hit 27-month highs.  This is just one data series, but the potential for a sustained European recovery is a theme that you will likely see Hedgeye highlighting more often heading into year-end. Meanwhile, a great day for Angela Merkel. German voters gave her a third four-year term and a better-than-expected showing for her Christian Democrat party, possibly leading to an absolute majority in Parliament. Our immediate-term Macro Risk Range for the DAX is 8563-8741.

Asset Allocation

CASH 45% US EQUITIES 20%
INTL EQUITIES 20% COMMODITIES 0%
FIXED INCOME 0% INTL CURRENCIES 15%

Top Long Ideas

Company Ticker Sector Duration
WWW

WWW is one of the best managed and most consistent companies in retail. We’re rarely fans of acquisitions, but the recent addition of Sperry, Saucony, Keds and Stride Rite (known as PLG) gives WWW a multi-year platform from which to grow. We think that the prevailing bearish view is very backward looking and leaves out a big piece of the WWW story, which is that integration of these brands into the WWW portfolio will allow the former PLG group to achieve what it could not under its former owner (most notably – international growth, and leverage a more diverse selling infrastructure in the US). Furthermore it will grow without needing to add the capital we’d otherwise expect as a stand-alone company – especially given WWW’s consolidation from four divisions into three -- which improves asset turns and financial returns.

HCA

Health Care sector head Tom Tobin has identified a number of tailwinds in the near and longer term that act as tailwinds to the hospital industry, and HCA in particular. This includes: Utilization, Maternity Trends as well as Pent-Up Demand and Acuity. The demographic shift towards more health care – driven by a gradually improving economy, improving employment trends, and accelerating new household formation and births – is a meaningful Macro factor and likely to lead to improving revenue and volume trends moving forward.  Near-term market mayhem should not hamper this  trend, even if it means slightly higher borrowing costs for hospitals down the road.

TROW

Financials sector senior analyst Jonathan Casteleyn continues to carry T. Rowe Price as his highest-conviction long call, based on the long-range reallocation out of bonds with investors continuing to move into stocks.  T Rowe is one of the fastest growing equity asset managers and has consistently had the best performing stock funds over the past ten years.

Three for the Road

TWEET OF THE DAY

The Euro is the beneficiary of Bernanke devaluing America's Purchasing Power - EUR/USD +1.7% last wk to +2.5% YTD

@KeithMcCullough

QUOTE OF THE DAY

"We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though." -Ben Bernanke, July 2005

STAT OF THE DAY

The S&P 500 has risen more than 150 percent since March 2009.


European Banking Monitor: To QE, Or Not To QE, That Is The Question

Below are key European banking risk monitors, which are included as part of Josh Steiner and the Financial team's "Monday Morning Risk Monitor".  If you'd like to receive the work of the Financials team or request a trial please email .

 

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European Financial CDS - Europe's banking system also likes QE, apparently. Of the 32 institutions we track, all but two tightened week-over-week.  Spain, Italy, Portugal and Russia all saw their bank swaps tighten significantly. 

 

European Banking Monitor: To QE, Or Not To QE, That Is The Question - zz.banks

 

Sovereign CDS – Sovereign swaps mostly tightened last week in response to the Fed's decision. Portuguese sovereign swaps tightened by -6.1% (-34 bps to 523 bps) and French sovereign swaps widened by 1.6% (1 bps to 68 bps).

 

European Banking Monitor: To QE, Or Not To QE, That Is The Question - zz. sov1

 

European Banking Monitor: To QE, Or Not To QE, That Is The Question - zz.sov2

 

European Banking Monitor: To QE, Or Not To QE, That Is The Question - zz.sov3png

 

Euribor-OIS Spread – The Euribor-OIS spread tightened by 1 bps to 12 bps. The Euribor-OIS spread (the difference between the euro interbank lending rate and overnight indexed swaps) measures bank counterparty risk in the Eurozone. The OIS is analogous to the effective Fed Funds rate in the United States.  Banks lending at the OIS do not swap principal, so counterparty risk in the OIS is minimal.  By contrast, the Euribor rate is the rate offered for unsecured interbank lending.  Thus, the spread between the two isolates counterparty risk. 

 

European Banking Monitor: To QE, Or Not To QE, That Is The Question - zz. euribor


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MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION

Takeaway: CDS around the world at the sovereign and bank level tightened in response to the Fed's decision not to taper. Addictions are hard to break.

Key Takeaways:

 

* High Yield – High Yield loves QE. Junk bond rates fell 26.7 bps last week, ending the week at 6.19% versus 6.46% the prior week.

 

* U.S. Financial CDS -  US Financial Swaps love QE. The announcement not to taper triggered an across-the-board tightening of US financial companies. Overall, 26 out of 27 domestic financial institutions saw their swaps tighten last week. Interestingly, this was a notably more positive outcome than we saw for the equities, where prices rose by a median 0.0% last week. The big banks and specialty finance companies were all winners, while much of the insurance complex saw stock price declines.

 

* European Financial CDS - Europe's banking system also loves QE, apparently. Of the 32 institutions we track, all but two tightened week-over-week.  Spain, Italy, Portugal and Russia all saw their bank swaps tighten significantly. 

 

* Asian Financial CDS - India is back in the saddle. Indian bank swaps tightened in a big way last week, declining by an average of 50 bps on the week alone. Japanese bank swaps also reacted to QE favorably with 5 of 6 issuers tightening. China was mixed. 

 

* Sovereign CDS – Sovereign swaps mostly tightened last week in response to the Fed's decision. Portuguese sovereign swaps tightened by -6.1% (-34 bps to 523 bps) and French sovereign swaps widened by 1.6% (1 bps to 68 bps).

 

 

Financial Risk Monitor Summary

 • Short-term(WoW): Positive / 7 of 13 improved / 2 out of 13 worsened / 4 of 13 unchanged

 • Intermediate-term(WoW): Positive / 5 of 13 improved / 4 out of 13 worsened / 4 of 13 unchanged

 • Long-term(WoW): Negative / 1 of 13 improved / 2 out of 13 worsened / 10 of 13 unchanged

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 15

 

1. U.S. Financial CDS -  US Financial Swaps certainly love QE. The announcement not to taper triggered an across-the-board tightening of US companies. Overall, 26 out of 27 domestic financial institutions saw their swaps tighten last week. Interestingly, this was a notably more positive outcome than we saw for the equities, where prices rose by a median 0.0% last week. The big banks and specialty finance companies were all winners, while much of the insurance complex saw stock price declines.

 

Tightened the most WoW: AGO, MET, AON

Widened the most/ tightened the least WoW: CB, XL, SLM

Tightened the most WoW: AXP, MET, COF

Widened the most/ tightened the least MoM: MBI, AGO, MMC

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 1

 

2. European Financial CDS - Europe's banking system also likes QE, apparently. Of the 32 institutions we track, all but two tightened week-over-week.  Spain, Italy, Portugal and Russia all saw their bank swaps tighten significantly. 

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 2

 

3. Asian Financial CDS - India is back in the saddle. Indian bank swaps tightened in a big way last week, declining by an average of 50 bps on the week alone. Japanese bank swaps also reacted to QE favorably with 5 of 6 issuers tightening. China was mixed. 

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 17

 

4. Sovereign CDS – Sovereign swaps mostly tightened last week in response to the Fed's decision. Portuguese sovereign swaps tightened by -6.1% (-34 bps to 523 bps) and French sovereign swaps widened by 1.6% (1 bps to 68 bps).

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 18

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 3

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 4

 

5. High Yield (YTM) Monitor – High Yield rates fell 26.7 bps last week, ending the week at 6.19% versus 6.46% the prior week.

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 5

 

6. Leveraged Loan Index Monitor – The Leveraged Loan Index rose 4.0 points last week, ending at 1812.

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 6

 

7. TED Spread Monitor – The TED spread fell 0.2 basis points last week, ending the week at 23.7 bps this week versus last week’s print of 23.89 bps.

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 7

 

8. CRB Commodity Price Index – The CRB index fell -1.1%, ending the week at 287 versus 291 the prior week. As compared with the prior month, commodity prices have decreased -0.3% We generally regard changes in commodity prices on the margin as having meaningful consumption implications.

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 8

 

9. Euribor-OIS Spread – The Euribor-OIS spread tightened by 1 bps to 12 bps. The Euribor-OIS spread (the difference between the euro interbank lending rate and overnight indexed swaps) measures bank counterparty risk in the Eurozone. The OIS is analogous to the effective Fed Funds rate in the United States.  Banks lending at the OIS do not swap principal, so counterparty risk in the OIS is minimal.  By contrast, the Euribor rate is the rate offered for unsecured interbank lending.  Thus, the spread between the two isolates counterparty risk. 

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 9

 

10. Chinese Interbank Rate (Shifon Index) –  The Shifon Index rose 58 basis points last week, ending the week at 3.557% versus last week’s print of 2.979%. The Shifon Index measures banks’ overnight lending rates to one another, a gauge of systemic stress in the Chinese banking system.

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 10

 

11. Markit MCDX Index Monitor – Last week spreads widened 11 bps, ending the week at 83 bps versus 94 bps the prior week. The Markit MCDX is a measure of municipal credit default swaps. We believe this index is a useful indicator of pressure in state and local governments. Markit publishes index values daily on six 5-year tenor baskets including 50 reference entities each. Each basket includes a diversified pool of revenue and GO bonds from a broad array of states. We track the 16-V1.

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 11

 

12. Chinese Steel – Steel prices in China fell 0.9% last week, or 33 yuan/ton, to 3,528 yuan/ton. We use Chinese steel rebar prices to gauge Chinese construction activity, and, by extension, the health of the Chinese economy.

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 12

 

13. 2-10 Spread – Last week the 2-10 spread tightened to 240 bps, -5 bps tighter than a week ago. We track the 2-10 spread as an indicator of bank margin pressure.

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 13

 

14. XLF Macro Quantitative Setup – Our Macro team’s quantitative setup in the XLF shows 1.8% upside to TRADE resistance and 1.5% downside to TRADE support.

 

MONDAY MORNING RISK MONITOR: TO QE, OR NOT TO QE, THAT IS THE QUESTION - 14

 

Joshua Steiner, CFA

 

Jonathan Casteleyn, CFA, CMT

 


Stock Update: FedEx Trim Time (FDX)

Takeaway: Industrials sector head Jay Van Sciver remains bullish on FDX, but says it may be time to take some profits.

Hedgeye Industrials sector head Jay Van Sciver says it may be time to take some profits in FDX. 

 

Stock Update: FedEx Trim Time (FDX) - fdx

 

While Van Sciver remains bullish on the stock, he says, “We would lighten up on our FDX long here – like sell half - for a few key reasons.

 

First, the shares have moved significantly higher within our fair value range.

 

Second, the details of the most recent quarter lead us to expect an opportunity to buy the shares back lower around FY2Q results.

 

Finally, we had expected capacity and inventory trends to turn more supportive than they have.

 

We are not dropping our long-term thesis and remain positive on the name, but acknowledge that no long-term thesis plays out without disruptions and trading opportunities.” Taking a magnifying glass to the company’s financials, Van Sciver notes “several unusual items that helped the Express margin, potentially introducing ‘choppiness’ to FY2Q.”


What’s New Today in Retail (9/23)

Takeaway: JCP/financing + no more Wi-Fi, JNY bids due, SHLD kitchen remodeling, WSM/PBteen celeb designer line, Costs rising in Bangladesh

What’s New Today in Retail (9/23)

 

COMPANY NEWS

 

JCP - J.C. Penney Said in Talks to Raise More Money for Turnaround

(http://www.bloomberg.com/news/2013-09-20/j-c-penney-said-in-talks-to-raise-more-money-for-turnaround-1-.html)

 

  • "J.C. Penney...is in talks to potentially raise more cash, said people with knowledge of the matter. The chain doesn’t have immediate cash needs, and is exploring fundraising amid shareholder pressure to take advantage of cheap financing, said the people, who asked not to be named as the deliberations are private. Goldman Sachs...which arranged a $2.25 billion loan for the retailer this year, is advising J.C. Penney on funding options including borrowing against its real estate, said one of the people."
  • "One option under consideration is for J.C. Penney to borrow against the real estate that it hasn’t already pledged as collateral on other debt, three people said. J.C. Penney values its owned and ground-leased real estate at $4.08 billion, according to a May investor presentation."

 

Takeaway: JCP does not need the cash right now, and our math suggests that it can go the next three years without tapping external sources. But a key consideration is that a new CEO would likely want to come in with zero liquidity risk. Our sense is that JCP is doing this to broaden the pool of potential CEOs.

 

JCP - JCPenney Cuts Off Free Wi-Fi

(http://www.fierceretail.com/story/jcpenney-cuts-free-wi-fi/2013-09-20)

 

  • "JCPenney is busy undoing the work of former CEO and ex-Apple retail head Ron Johnson, and this week the company is axing the free Wi-Fi he once dubbed 'fundamental architecture' for stores. The retailer confirmed the removal of the service to BuzzFeed after shoppers voiced their displeasure on Twitter. A JCPenney spokesperson explained that the signal wasn't used very often by customers."
  • "JCPenney has already invested $12 million installing the system last year, but shutting it off for customers will save the chain about $7 million a year, according to BuzzFeed."
  • "...CEO Mike Ullman, the investment hasn't been worth it. In addition to slow usage, he said the mobile checkout technology that was based on the Wi-Fi was confusing for most customers. Shoppers also don't tend to realize free Wi-Fi in a store exists, or just choose to use their own data plan instead. Mobile checkout will still be able to run on the private Wi-Fi network, but Ullman will put a new focus on making sure store associates are visible and able to assist customers."

 

Takeaway: This borders on ridiculous. But the reality is that people don’t go to JCP to get free Wi-Fi.

 

 

 

JNY - Bids Due for The Jones Group

(http://www.wwd.com/business-news/mergers-acquisitions/bids-due-for-the-jones-group-7177993?module=hp-topstories)

 

  • "The last of the second-round bids in the Citi-led auction to sell the company are expected to come in today, according to sources."
  • "Private equity giant KKR & Co. and Sycamore Partners have paired up for a bid and are believed to be a formidable presence in the process. Leonard Green & Partners and Golden Gate Capital have also each expressed interest in the firm or in certain of its businesses, while Iconix Brand Group Inc. is said to have taken a look at the apparel side of the company."

 

Takeaway: We were asked by someone if we thought Steve Madden would be interested in Stuart Weitzman and 9 West. Our answer is Yes. Footwear assets are the crown jewel at JNY.

 

 

WMT - Walmart to present paper to government on sourcing model

(http://www.business-standard.com/article/companies/walmart-may-soon-inform-dipp-about-its-sourcing-model-113092200586_1.html)

 

  • "American retail chain Wal-Mart Stores, yet to make an application for opening retail stores in India, is planning to send a paper on its sourcing model to the Department of Industrial Policy and Promotion (DIPP) soon. The next round of government clarification to the multi-brand retail policy could come after weighing the points made in that paper."
  • "The Cabinet cleared up to 51 per cent foreign direct investment (FDI) in multi-brand retail exactly one year ago. But there hasn’t been a single proposal so far, due to policy riders which are considered tough by the industry. Thirty per cent mandatory sourcing from Indian micro, small, and medium enterprises (MSMEs) tops the list of hurdles. There are other roadblocks like the requirement of statewise clearances to retail chains, upcoming elections and fear of a policy reversal if the Bharatiya Janata Party (BJP), a party that has opposed FDI in retail, forms the government at the Centre. To woo foreign investors, DIPP recently issued clarifications easing some of the norms. But companies are asking for more."

 

Takeaway: WMT’s dance with India has been years in the making. If it succeeds, however, in accelerating its’ rollout in India, look for the stock to be revalued higher.

 

WSM - PBteen unveils first-ever collection with a celeb stylist, designer

(http://www.retailingtoday.com/article/pbteen-unveils-first-ever-collection-celeb-stylist-designer)

 

  • "PBteen has unveiled an inaugural collaboration with celebrity stylists and fashion designers Emily Current and Meritt Elliott. The exclusive, one-of-a-kind collection is the first collaboration of its kind for PBteen and represents Current’s and Elliott’s debut into the world of interiors and home furnishings."
  • "The collection consists of more than 37 products across seven key categories and includes bedding, furniture, lighting, wall décor, decorative accessories and jewelry storage…The Emily & Meritt for PBteen Collection ranges from $29 to $799."

 

NKE - Nike’s Knight, Wife Pledge $500 Million to Cancer Research

(http://www.bloomberg.com/news/2013-09-22/nike-s-knight-wife-pledge-500-million-to-cancer-research.html)

 

  • "Nike Inc. Chairman Philip Knight and his wife Penny Knight pledged $500 million to jumpstart a $1 billion cancer research initiative at Oregon Health & Science University...The gift is contingent on the university raising an additional $500 million for cancer within two years."

 

Takeaway: You gotta hand it to the guy, between this and his gifts to the University of Oregon’s Athletic Department, he’s establishing himself as one of the foremost philanthropists of his day. Note, however, that Nike does not consume much of his time anymore.

 

HD - Home Depot elects CVS exec to board

(http://www.retailingtoday.com/article/home-depot-elects-cvs-exec-board)

 

  • "The Home Depot has elected Helena B. Foulkes to the company's board of directors. Foulkes will be a member of the finance and leadership development and compensation committees."
  • "During her more than 15 years at CVS, Foulkes has served as the company's EVP and chief marketing officer, SVP of health services of CVS/pharmacy, SVP, marketing and operations services, January to October 2007, and SVP, advertising and marketing"

 

SHLD - Select Sears Hometown & Outlet Stores debut kitchen remodeling services

(http://www.retailingtoday.com/article/select-sears-hometown-outlet-stores-debut-kitchen-remodeling-services)

 

  • "More than 20 Sears Home Appliance Showroom and Sears Appliance & Hardware stores in New Jersey, Pennsylvania and Delaware have unveiled kitchen remodeling services from Kitchen Tune-Up, a national kitchen and bath remodeling franchise."
  • "The stores feature an interactive Kitchen Tune-Up kiosk, where customers can learn about affordable options to update their kitchen, view cabinet door samples and use an iPad to see project ideas and book an appointment for a no-obligation estimate."

   

 

INDUSTRY NEWS

 

MKS - M&S Uses New Technology To Monitor Factories

(https://www.sourcingjournalonline.com/ms-uses-new-technology-to-monitor-factories/)

 

  • "In the aftermath of Bangladesh’s Rana Plaza tragedy, retailers have been struggling to figure out how to monitor the factories they contract with, remote as they often are. Marks & Spencer (M&S) has announced a plan to use new technology to keep tabs on its factories, designed for mobile phones."
  • "The new technology is designed to collect information directly from the factories regarding labor conditions, safety, job training and general worker satisfaction. Surveys are distributed to factory workers in various languages–Hindi, Sinhalese, etc.– and returned anonymously. M&S has already tested the program with thirteen of its suppliers in India and Sri Lanka, interviewing more than 2,000 workers."
  • "M&S plans a massive rollout of the program in the future, with the intent to reach thirty more factories and 22,500 more workers in India, Sri Lanka and Bangladesh. It remains unclear how they intend to ensure workers have access to mobile phones and iPads, or how they can guarantee they are permitted by supervisors to answer the questionnaires candidly."

 

Two Hundred Bangladesh Apparel Factories Shut on Labor Unrest

(http://www.businessweek.com/news/2013-09-23/two-hundred-bangladesh-apparel-factories-shut-on-labor-unrest)

 

  • "Bangladesh apparel manufacturers suspended production in about 200 garment factories after at least 10,000 workers took to the streets demanding a salary increase...The workers pelted the factories with bricks and blocked a highway, Abdus Salam Murshedy, president of the Exporters Association of Bangladesh, said in a phone interview today."
  • "The protesters demanded a minimum monthly salary of 8,114 taka ($104), up from 3,000 taka now, Murshedy said as he headed into a meeting with government officials to look into ways to control the unrest."
  • "At a meeting with labor leaders and government officials on Sept. 17, factory owners’ representative Arshad Jamal Dipu proposed increasing the monthly basic salary by 600 taka to 3,600 taka."

 

What’s New Today in Retail (9/23) - 1111111111111111

 

 

Takeaway: Bangladeshi garment exports totaled $12.56 billion to Europe, $4.99 billion to the US, and $0.98 billion to Canada in the 12 month period ended June 30, 2013. As noted in the article, building safety improvements are expected to add $0.10 to the end price of each manufactured garment, that coupled with an increase in the minimum wage level could mean another bump to the final cost.

 

Cambodian Garment Factories Come Under Scrutiny

(http://online.wsj.com/article/SB10001424052702303818704579089810120675896.html?mod=WSJ_business_whatsNews&cb=logged0.6578250140883029)

 

  • "A monitoring group backed by the United Nations said it would begin to publicize garment factories' compliance with worker rights and safety standards in Cambodia, a controversial program that its organizers say will be the world's most extensive initiative to improve working conditions at plants."
  • "The program...Better Factories Cambodia began rolling out on Friday" 
  • "But Cambodia's government and the country's factory association have opposed the new program, saying it could wind up shaming only some factory owners and driving business to other countries where oversight is less rigorous."
  • " Better Factories, among other things, inspects manufacturing facilities for problems such as child labor and unsafe conditions and offers training for factories to upgrade but has no enforcement power."

 

What’s New Today in Retail (9/23) - 22222222222222222

 

 

  

Bangladesh Factory Owners Fear Excessive Minimum Wage Hike

(https://www.sourcingjournalonline.com/bangladesh-factory-owners-fear-excessive-minimum-wage-hike/)

 

  • "Garment factory owners in Bangladesh are seeking a minimum wage increase for workers that is commensurate with the rate of inflation, but doesn’t exceed 20 percent."
  • "The current minimum wage for garment workers in Bangladesh is Taka 3,000 ($39) per month after it went up by more than 80 percent in 2010. With the proposed rate increase, the new monthly minimum wage would be Taka 8,000 ($102)."
  • "Production costs have increased with newly implemented fire and building safety compliance following the Rana Plaza building collapse and owners fear a wage increase of more than 20 percent would cause their factories to suffer."

 

 

Retailers’ online holiday campaigns to start before Halloween is over

(http://blogs.marketwatch.com/behindthestorefront/2013/09/20/retailers-holiday-campagins-to-start-before-halloween-is-over/)

 

  • "Almost half [of retailers] — 49% — say they will launch their first online holiday campaign before the ghosts and sexy nurses have finished marking Halloween, online traffic-tracking firm Experian Marketing Services’ first such survey of 212 retail marketing executives found."
  • "In terms of the way retailers are marketing to shoppers on the Web, 59% of them said they will be using online displays, followed by 55% of them citing email marketing. Print advertising comes in third place with 46%. In comparison, only 24% of marketers cited mobile marketing as a key holiday marketing channel."
  • The Experian survey showed 70% of marketers said they plan to use some sort of online promotional offer this holiday season. Free shipping, cited by 39% of retailers, ranked as the top promotional tactic, followed by deal-of-the-day offers and e-coupons. While retailers such as Wal-Mart Stores Inc...and Toys “R” Us have touted free layaway offers, only 3% of executives surveyed say they plan to resort to layaway."
  • "A confident 28% of respondents said they don’t plan to offer any promotions this holiday. While mobile didn’t rank as a top marketing priority, 43% of retail respondents said they plan to develop 'mobile optimized websites,' followed by 'mobile optimized email.'"

 

 


Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.

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