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Manic Depressionistas, Be Careful...

This morning’s weekly jobless claims release was the least-toxic we have seen this year.

 

At 466,000 claims, this was better on both a sequential (week-over-week) and a 4-week moving average basis. In the chart below you can see these points. Last week’s claims were 505,000 and the 4-week moving average (yellow line) is 496,500.

 

What does it mean? Well it is probably not enough to make the November monthly jobs report much better, but it definitely isn’t something that’s going to make it worse. Manic Depressionistas, be careful. An 11% unemployment rate is not going to be in the cards – not this or next month, at least.

 

What’s perverse about this (and not being read through in this way by Mr. Macro Market today) is that anything that remotely resembles a less-than-toxic US Employment picture is bad for the stock market, in the immediate term. Why? Well, that’s easy – that would be US Dollar Bullish.

 

Which leads me to asking myself another question. Is today’s jobless claims report marking the YTD low for the Bombed Out Buck?

 

He Who Sees No Bubbles at the Fed once claimed to be “data dependent” – this week’s housing and employment data points, combined with last week’s Consumer Price Inflation report are plenty good enough to NOT be holding interest rates at this ridiculous “emergency” level of ZERO percent.

 

There is an immediate term bubble in Gold and an intermediate term bubble in short term US Treasuries.

 

Given the recent data, the Fed’s policy of “exceptional and extended” remains unsustainable and unreasonable.

KM

 

Keith R. McCullough
Chief Executive Officer

 

Manic Depressionistas, Be Careful...  - claims

 


Consumer Confidence Wanes on Both Sides of the Atlantic

As one indicator of sentiment that we track, the GfK released its December German Consumer Confidence report today. In contrast to yesterday’s release of the German Ifo Business Confidence Survey that showed a measurable increase in the business climate (93.9 in November versus 92.0 in October), today’s consumer report falls more in line with our overall intermediate outlook for the Eurozone’s largest economy, and the region itself.

 

Consumer confidence fell to 3.7 in December from 4.0 in the previous month, while the sub-surveys of economic and income expectations declined significantly and consumers’ propensity to spend was flat. More broadly, the data has been trending downward over the last months (see chart below).

 

We continue to expect the rate of improvement in broader fundamentals to slow sequentially into year-end and in 1H ’10 for Germany, and many Eurozone countries, with mild growth next year. That said, one bullish indicator for Germany has been its rate of unemployment, which has held steady ~8.1% over the last four months. And today the government announced that its program (subsidy) of shortened work hours or part-time jobs, known as Kurzarbeit in German, which was set to expire at year-end and by all measures was the substantial crutch in maintaining employment, will be extended by another 12 months. The decision by Chancellor Angela Merkel’s government means that the state will pay up to 67% of a worker’s salary for a period of up to two years to keep workers across industry “employed”. Recent data suggests that some 1 million workers were covered under the program.

 

While prolonging Kurzarbeit should hinder joblessness, on the TAIL we’re left to wonder if striking jobs now would be a better solution, both limiting government expenditure and encouraging companies to right-size their labor force...

 

Irrespective of the government’s extension of short-time work, we still expect joblessness to be a major concern for the consumer in 2010. Neither Eurozone PMI data out this week (See Topping Off on 11/23) nor German private consumption Q3 figures suggest the consumer is ready to spend, and the stimulus associated with the country’s cash for clunkers is now rear-view. Additionally, today’s news from the Bundesbank that German banks may need to further write-down another 90 Billion Euros of bad loans won’t add confidence in the broader economy.    

 

While we see bearish fundamental headwinds for Germany ahead, and as an extension for Eurozone countries that rely on the stronger economies of the region like Germany and France for trade, we are on balance bullish on the German economy versus some of its European peers as we believe that global demand should melt up to support Germany’s industrial and manufacturing base.

 

Matthew Hedrick

Analyst

 

Consumer Confidence Wanes on Both Sides of the Atlantic  - GfK

 


CONSUMER CONFIDENCE TUMBLES

With Thanksgiving upon us and the Holiday season right around the corner, there are many challenges and distractions ahead.  With 2009 looking to be a much better year for most market participants versus 2008, it does not feel like there is going to be a melt-up or down in the market before year-end.  Feelings are not an investment process, but everyone has them.

 

Confidence is falling…  How many times have you read over the past two months that “job losses threaten to limit spending heading into the holiday shopping season”?  Today it was reported that the University of Michigan “final” index of consumer sentiment decreased to 67.4 in November from 70.6 in October.  The final reading was slightly better than the preliminary reading of 66 reported in early November.

 

Another smaller but equally important measure of consumer confidence is how people feel about treating their families to a night out to eat.  On this measure, things are not improving either.  Malcolm Knapp reported that October casual dining same-store sales declined 4.9%, with traffic down 4.4%.  Given what we have from a handful of casual dining restaurant operators about trends in October, it’s not surprising that October improved sequentially from September when comparable sales declined 6.4% and guest counts came in -5.3%.  

 

If you look at 2-year average trends, however, the October numbers do not provide any reason to be optimistic as both same-store sales and traffic trends continued to decelerate from September.  Demand in October was not as bad as last December when trends bottomed, but on a 2-year average basis we are not that far from it with the October comparable sales 2-year trend down 5.5% relative to -6.7% in December 2008. 

 

The two best performing sectors over the past month have been defensive ones - Health Care and Consumer Staples - rising 7.7% and 4.3% respectively.  This compares to the S&P 500 up 2.4%.  Research Edge’s Healthcare maestro, Tom Tobin wrote today.  “If the outperformance in Healthcare has been due to the fading regulatory threat, the most interesting chart is in the Kaiser Family Foundation Poll on Health Reform.  It appears the public is losing interest, or sees what Wall St. sees.  Maybe it’s like turning off the game when your team is down and the clock is ticking down.  Do the people polled simply have other things to worry about like Thanksgiving dinner and keeping a job?”

 

Consumers are feeling the pinch in a number of ways and it’s hard to see a light at the end of the tunnel.  While I always look forward to the start of a new year, I’m nervous about what 2010 has in store for us.   

 

Howard W. Penney

Managing Director

 

CONSUMER CONFIDENCE TUMBLES - UM

 


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Bubbly Gold: Selling Some...

We have been bullish, as our competitor Dennis Gartman, likes to say “of Gold” for a long time. In fact, YouTube fans will recall that we wrote an Early Look strategy piece titled “Short Of Garty” on 5/15/09, emphasizing our bullish long term view.

 

For old time’s sake, here’s an excerpt of that note:

---

"Thinking well is wise; planning well, wiser; doing well wisest and best of all."- Persian Proverb

Of course I am not "short of" the man. As all Early Look titles go, we have to have some fun at these un-Godly hours of the macro morning. Dennis Gartman is one of the great grinders of the early morning gridiron. The investment community is a better place with him in it.

This does not mean, however, that I need to subscribe to the panting dog nodding that CNBC's Fast Money's producer must force his "Traders" to look into the eye of the camera with when listening to the Gartman gospel. Someone has to hold the members of this circus act accountable. The American Financial system is being YouTubed by the world, daily, and it's just too embarrassing to know that The Client (China) thinks that this is what US investors do.

So Garty, lets slap the ole red, white and blue accountability pants on and take a walk down the path of a few positions that you are currently "short of", The Dow and Gold:

1.      I have also been "bearish of" the Dow via the DIA etf, but covered my position

2.      I am long Gold via the GLD etf, and remain "bullish of" it

---

 

Today I am selling ½ of the position we currently hold “long of” gold in our Asset Allocation Model. No, we are not “bearish of” gold. But we are “bearish of” the crowd when they bubble an immediate term price up like this into month end (Monday).

 

Our immediate term TRADE (overbought) line for Gold is in the chart below ($1190/oz). You can buy it back in the shaded green range we have highlighted below ($1103-$1142). Gold is finally getting Bubbly.

KM

 

Keith R. McCullough
Chief Executive Officer

 

Bubbly Gold: Selling Some...  - Gold

 


American Gratitude

“As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.”
–John F. Kennedy

Every morning since I left the Carlyle Group’s hedge fund, I have woken up on a mission. My mission is to prove myself – not to them, but to me.
 
I want to prove myself worthy of the opportunity that this great country has provided me. Freedom of thought. Freedom of speech. These are freedoms to live by.
 
This American Thanksgiving is very special for my family. My wife, Laura, is expecting our second child. My son, Jack, is getting ready to skate. The highest appreciation I can give to them, is to live for them.
 
When I drive up 95 to New Haven every morning, I think of them. Then I express whatever I have in these arthritic hockey knuckles to you. All I have is 45 minutes of writing time, then edits. I know I’m not always the easiest person to agree with. Nor am I the easiest to always like. So, I’d like to take this brief opportunity to thank all of you.
 
Thank you for your time. Thank you for your patience. And, most of all,  thank you for providing me the resources to build a wonderful American firm. We have hired 34 people in the past 18 months. I live by them too.
 
Before I thank one more core constituency who makes every morning missive possible, I’ll take a moment to address something my Macro Team always gets asked for throughout the day - our intermediate-term TREND lines.
 
Here are my top 12 country levels – refreshed for this morning’s prices:
 
1.      SP500 = 1051 (bullish)

2.      Nasdaq = 2089 (bullish)

3.      US Financials (XLF) = $14.61 (bullish, barely)

4.      Chinas’ Shanghai Composite = 3051 (bullish)

5.      Japan’s Nikkei = 10,169 (bearish)

6.      South Korea’s KOSPI = 1626 (bearish)

7.      UK’s FTSE = 5049 (bullish)

8.      Germany’s DAX = 5563 (bullish)

9.      Russia’s RTSI = 1261 (bullish)

10.  Brazil’s Bovespa = 60,894 (bullish)

11.  Canada’s TSE = 11,161 (bullish)

12.  Australia’s All Ords Composite = 4607 (bullish)

 
Finally, I’d like to thank our troops.
 
They watch over us every night. They ensure that guys like me can run my mouth, and that gals like you can hit me back. These are the men and women that make our Thanksgivings possible. They do not “utter words”. They “live by them.”
 
Best of luck out there today.
KM


LONG ETFS
 
VXX – iPath S&P500 Volatility With the market hitting its YTD high on 11/23 we bought volatility.

XLK – SPDR Technology We bought back our position in Tech on 11/20. Rebecca Runkle has an innovation story in Mobility and Team Macro has an M&A story in our Q4 Theme, the “Banker Bonanza”. We’re bullish on XLK on TREND (3 Months or more).

EWA – iShares Australia We remain bullish of Glenn Stevens at the RBA and how Australia is issuing its citizenry a rate of return. With growing confidence in domestic demand recovery and a commodity export complex with strategic proximity to China’s reacceleration, there are a lot of ways to win being long Australia.

XLU – SPDR Utilities We bought low beta Utilities on discount on 10/20.

GLD – SPDR Gold We bought back our long standing bullish position on gold on a down day on 9/14 with the threat of US centric stagflation heightening.   

CYB – WisdomTree Dreyfus Chinese Yuan The Yuan is a managed floating currency that trades inside a 0.5% band around the official PBOC mark versus a FX basket. Not quite pegged, not truly floating; the speculative interest in the Yuan/USD forward market has increased dramatically in recent years. We trade the ETN CYB to take exposure to this managed currency in a managed economy hoping to manage our risk as the stimulus led recovery in China dominates global trade.

TIP – iShares TIPS The iShares etf, TIP, which is 90% invested in the inflation protected sector of the US Treasury Market currently offers a compelling yield. We believe that future inflation expectations are currently mispriced and that TIPS are a efficient way to own yield on an inflation protected basis, especially in the context of our re-flation thesis.

 
SHORT ETFS
 
EWJ – iShares Japan While a sweeping victory for the Democratic Party of Japan has ended over 50 years of rule by the LDP bringing some hope to voters; the new leadership  appears, if anything, to have a less developed recovery plan than their predecessors. We view Japan as something of a Ponzi Economy -with a population maintaining very high savings rate whose nest eggs allow the government to borrow at ultra low interest levels in order to execute stimulus programs designed to encourage people to save less. This cycle of internal public debt accumulation (now hovering at close to 200% of GDP) is anchored to a vicious demographic curve that leaves the Japanese economy in the long-term position of a man treading water with a bowling ball in his hands.

EWY – iShares South Korea
South Korea has joined Japan in the ominous position of broken TREND and TRADE. This is not China or Taiwan. This is an early cycle economy that we want to be short against China/Taiwan.

XLI – SPDR Industrials We shorted Industrials again on 11/9 on the up move as the US market made a lower-high.  This is the best way for us to be short the hope of a V-shaped recovery.   

EWU – iShares UK Despite areas of improvement, broader fundamentals remain shaky in the UK: government debt continues to expand, leadership in critical positions lacks, and the country’s leverage to the banking sector remains glaringly negative.  Q3 saw its GDP contract by -0.4%. Further bank stimulus and the BOE’s increase in its bond purchasing program suggest that this will not end well.

XLY – SPDR Consumer Discretionary We shorted Howard Penney’s view on Consumer Discretionary stocks on 10/30.

SHY – iShares 1-3 Year Treasury Bonds
 If you pull up a three year chart of 2-Year Treasuries you'll see the massive macro Trend of interest rates starting to move in the opposite direction. We call this chart the "Queen Mary" and its new-found positive slope means that America's cost of capital will start to go up, implying that access to capital will tighten. Yields are going to continue to make higher-highs and higher lows until consensus gets realistic.


RETAIL FIRST LOOK: Sentiment Shake Up

RETAIL FIRST LOOK

 November 25, 2009

 

 

TODAY’S CALL OUT

 

As earnings season draws to a close, there are some notable callouts from our sentiment chart. The group’s total short interest continues to decrease, but at a lower rate than we have observed in some time.  Key individual callouts are also noted.

 

 

As the group’s total short interest continues to decrease, but at a lower rate, there are some notable callouts.  Our sentiment chart highlight’s some key individual moves, most of which are positive.  The chart below focuses on the outliers from the sell-side (weighted buy, sell, hold ratings), the buy-side (short interest as a percent of float), and the inside (recent insider transaction movement).  Here are the most notable changes over the last two months:

                Stocks that are more loved: COLM, GAP, DDS, LIZ, PLCE, NTRI, M, AAP, and LAZ

                Stocks that are more disliked: BKS, CONN, TBL, GIL, KBH, ELY, VFC

 

In looking specifically at short interest, there are some recent developments worth noting.  As a group, the apparel, retail, and footwear space has seen short interest continue to decline. As always,  there are some meaningful outliers:

                Stocks with decreasing short interest: JOSB, CBK, VLCM, COLM, RL, CROX, PSS, UA, DKS, HBI, ANF,

                GYMB, and HOTT

                Stocks with increasing short interest: CHRS, LIZ, BONT, DDS, SKS, GCO

 

Enjoy your Thanksgiving with your family and friends.

 

RETAIL FIRST LOOK: Sentiment Shake Up - 1

 

RETAIL FIRST LOOK: Sentiment Shake Up - 2

 

RETAIL FIRST LOOK: Sentiment Shake Up - 3

 

RETAIL FIRST LOOK: Sentiment Shake Up - 4

 

 

LEVINE’S LOW DOWN

  • On heels of a reduced outlook mainly due to incremental spending on Barnes & Noble’s e-reader launch, the company’s CEO believes digital content can be a multi-billion dollar business for the retailer. Management also believes that given large barriers to entry, digital content distribution has the potential to be a more concentrated business than physical bookselling. Barriers to entry cited include content aggregation on a massive scale, content formatting (i.e multiple platforms, multiple devices), digital rights management, and content synchronization. I’m not sure I agree, as it seems digital content distribution changes the players for which BKS will be competing with (i.e Google) rather than limiting the number such competitors.
  • On the subject of heavy discounting by discounters of best sellers, BKS management reminded investors that this topic has been discussed for 10 years now. As it stands currently, best sellers account for 5% of BKS’ sales, with the very top sellers accounting for 1%. Approximately 50% of all books are sold in channels other than dedicated booksellers.
  • In an effort to drive incremental traffic and maintain a competitive position in the marketplace, FRED stepped up its marketing and promotional activity in 3Q. However, the net result of the increased promos and ad spend was not incremental traffic gains or rub-off sales. Instead, Fred’s customers cherry-picked promotional items, causing a negative impact on gross margins. Management also noted that the competitive environment is expected to remain aggressive in 4Q, as media spend by retailers is anticipated to increase 45%-100% on average.
  • Even with substantially better than expected 3Q EPS results, management of DLTR noted that the majority of upside on gross margins was due to improved freight and fuel costs. Offsetting these y/y improvements was the continued margin drag from increases in consumables as a percentage of the product mix. With substantial freight and fuel cost savings now behind us, we will not be surprised to see more and more retailers talking about challenging compares on these line items as we get into Spring.
  • Genesco continues to lead the pack on cost savings from real estate renewals and negotiations. The company noted that is seeing on average a 10% reductions in rent as a result of its efforts. It’s also important to note that 50% of GCO’s store base is up for some renewal or kick-out clause over the next 3 years.
  • At DSW, women’s boots comped up 50% for the quarter! Yes, that’s 50%. Boots represented about 20% of sales in 3Q and are expected to grow to 30% of sales in 4Q. Year over year penetration of the category is up about 500bps.
  • E-commerce continues to be a relative outperformer when compared to the performance of the bricks and mortar. Both AEO and BKS cited positive sales growth in e-commerce, while both reported sales declines. Overall, e-commerce has been a big positive standout almost across the board for retailers with online sales capabilities.
  • Despite a still challenging retail backdrop, J Crew reported its highest operating margin the company’s history in 3Q. While sales trends were strong, the company’s ability to flow fresh goods frequently, manage inventories tightly (down 17% per foot), and keep promotional activity to minimum were all key drivers to the standout results. While there was definitely some business left on the table as a result of the tight inventory control, management is content with selling out of items that work in effort to boost a “buy now” mentality on the part of its customers.

 

MORNING NEWS 

 

Consumer Confidence Rises - Consumer confidence rose for November as fewer shoppers said they expected business conditions or the labor market to worsen over the next six months, according to The Conference Board. The research group’s Consumer Confidence Index rose to 49.5 this month from 48.7 in October. A year ago, the index stood at 44.7. The Expectations Index increased to 68.5 this month from 67 in October and the Present Situation Index dipped to 21 from 21.1. “The moderate improvement in the short-term outlook was the result of a decrease in the percent of consumers expecting business and labor market conditions to worsen,” said Lynn Franco, director of the group’s Consumer Research Center. “Income expectations remain very pessimistic and consumers are entering the holiday season in a very frugal mood.” <wwd.com>

 

PPR chief expands on plans for sales and acquisitions - PPR chief executive François Pinault has revealed that he plans to sell the retail arms of the French group “the sooner, the better” but said he hadn’t created a deadline for the planned divestments. News broke on Monday that PPR, which owns the Gucci Group and Puma, is looking to sell its retail businesses, which include Redcats, the mail order firm that owns the La Redoute catalogue, as well as book and music retailer Fnac and furniture chain Conforma. Pinault told the Wall Street Journal yesterday: “We have a major weakness - retail. It is a business that cannot develop quickly abroad.” He added that this was because it takes consumers a long time to accept an unfamiliar name. In the interview, Pinault added that with global stock markets stabilising, PPR is reviving its strategy to focus on brands over retail - a strategy he began with the sale of the Printemps department store group in 2006. <drapersonline.com>

 

Schumer Calls Foul on Adidas for its Plans to Move NBA Jersey Production to Thailand from Upstate NY - Sen. Charles Schumer (D., N.Y.) on Tuesday urged Adidas to keep production of NBA and WNBA uniforms and apparel in the U.S. after the activewear firm’s contract manufacturer in upstate New York said production was moving to Thailand. Adidas has an exclusive contract with the NBA to supply the league’s teams with their official uniforms. “It’s flat wrong for Adidas to move the production of jerseys worn by NBA players outside the United States when there are U.S. companies that have done this work so well and for so long,” Schumer said. “And to do it in this economic climate adds insult to injury.” He called on the company to reverse its decision and continue producing jerseys in the U.S. Adidas said it was moving production “to facilities located closer to the source of uniform materials.”  <wwd.com>

 

Saks Renegotiates $500M Credit Agreement - After months of work, Saks Inc. successfully negotiated a two-year extension and amendment for its $500 million revolving credit facility, which now expires in November 2013. “This year we undertook a series of important actions that strengthened our capital structure and will provide considerable flexibility going forward,” said Kevin Wills, executive vice president and chief financial officer. “In addition to the extension and amendment of the revolving credit facility, we issued $120 million of convertible notes in May, and we completed a $100 million common stock offering last month. Proceeds of those transactions were used to reduce borrowings on our revolving credit facility.” <wwd.com>

 

Will Pent-up Demand Drive Sales? - The positive effects of perceived pent-up consumer demand could be lost in the Great Tradedown. Analysts and economists agree shoppers are getting tired of reining in spending. But even with their self-control weakening, a budget-breaking spree seems unlikely. Consumers are more likely to shop the off-price channel, snatch up discounted goods or treat themselves to a special gift. “We do see demand increasing,” said Christine Day, chief executive officer of Lululemon Athletica Inc. “It is driven by less inventory and choices — a higher sense of urgency to buy and careful investment in a few good pieces for the woman that has not bought for herself in quite a while.” Like others retailers, Day isn’t looking for consumers to return to a credit card-propeled shopping existence anytime soon. “I hear more conversation about saving for a carefully thought-out purchase, and I think that will stay with us for a while,” she said. The total amount of outstanding consumer credit fell at an annual rate of 7.2 percent in September and has dropped for eight consecutive months — the longest string of declines since 1943, when the Federal Reserve began keeping records.  <wwd.com>

 

Fed Officials Cut Forecasts for Unemployment Rate - Federal Reserve officials trimmed their forecasts earlier this month for the U.S. jobless rate in 2010 and 2011 as the economy rebounded while keeping their outlooks “broadly similar” to previous projections. Fed governors and regional-bank presidents predicted the unemployment rate will range from 9.3 percent to 9.7 percent in next year’s fourth quarter, down from the June projection of 9.5 percent to 9.8 percent, according to minutes of the Federal Open Market Committee’s Nov. 3-4 meeting released today. Chairman Ben S. Bernanke and other policy makers on Nov. 4 said they would keep interest rates “exceptionally low” for an “extended period.” The statement by the FOMC suggested a decision to raise rates will hinge on changes in the labor market, inflation and inflation expectations. <bloomberg.com>

 

U.S. Consumer Spending, Incomes Probably Improved in October - Consumer spending probably rebounded in October, an indication that mounting unemployment has yet to stifle Americans’ willingness to buy. Purchases increased 0.5 percent after dropping by the same amount in September, according to the median estimate of 75 economists surveyed by Bloomberg News. Other figures may show orders for durable goods and home sales climbed. Uneven gains in spending signal consumers are unlikely to provide sustained support to the U.S. economy as it emerges from the worst recession since the 1930s. A jobless rate that is projected to exceed 10 percent through the first half of next year means households will contribute less to growth.  <bloomberg.com>

 

China: Excess capacity intensifies in textile sector - According to the " report of follow-up investigation on questionnaires among Chinese enterprise managers in 2009, the industries of textile, papermaking and chemical fibers how the situation of relatively serious overcapacity. Survey results show that more than 60 percent (63.4 percent) of business operators consider that their business sectors exist excess capacity, among them, 44.8 percent believe their sectors exist "some surplus capacity" 18.6 percent say that their sectors exist "serious surplus capacity"; 27.5 percent believe their sectors are "normal"; 9.1 percent think their sectors exist insufficient capacity, 8.4 percent feel their sectors exist "some shortage in capacity", 0.7 percent say their sectors exist "seriously inadequate capacity." <fashionnetasia.com>

 

Zappos.com Partners with Overlay.TV - Zappos.com has partnered with interactive video firm Overlay.TV to bring its catalog of products to life through video and to transform the way customers interact with the online store. The clickable videos are fully integrated with the site's e-commerce back-end and reflect inventory events such as out-of-stock and discontinued items as well as promotions and special offerings. The solution enables viewers to shop directly from videos that can be shared across the web on blogs and social network profiles. "The ability to see a product in action, to click on it for more information, to share it on Facebook, and add it to your cart without even leaving the page is a major change for this industry," says Rob Lane, CEO and Co-Founder of Overlay.TV. "Our approach is 100% about improving the customer experience, and giving them the tools to share that experience with their networks, which makes what we're doing a perfect fit for Zappos." <sportsonesource.com>

 

Japan Exports Fall Least in a Year on Global Stimulus - Japan’s exports fell at the slowest pace in a year in October as worldwide government spending boosted demand, sustaining the economic recovery. Shipments abroad slid 23.2 percent from a year earlier, compared with a 30.6 percent decline in September, the Finance Ministry said today in Tokyo. The median estimate of 18 economists surveyed by Bloomberg was for a 26.8 percent drop.  <bloomberg.com>

 

Italy Consumer Confidence Rose in November on Economic Outlook - Consumer confidence in Italy unexpectedly rose in November after the economy emerged from its worst recession since World War II. The Isae Institute’s consumer confidence index climbed to 112.8 from 111.7 in October, the Rome-based research center Isae said today in an e-mailed statement. Economists had forecast a drop to 111.5 for this month, the median of 13 estimates in a Bloomberg News survey showed. Italy’s economy emerged from its fourth recession since 2001 in the third quarter as the recovery in Europe boosted exports, and growth may accelerate to more than 1 percent in 2010, Finance Minister Giulio Tremonti said yesterday.  <bloomberg.com>

 

China's One-Child Generation Clamors for Luxury Goods - The X factor in China’s burgeoning luxury consumption is the country’s one-child generation — a group of people who tend to be highly individualistic and perceive luxury goods as a way to set themselves apart. The population policy, in place in China’s cities for 30 years, has created a value system among these millions of only-children that is “more self-indulgent and self-interested” than the more communal ways of their predecessors, said Patti Pao, president and founder of strategic consultant Pao Principle and author of a new “China Luxury Panel” report. The rising tide of young adults [are] clamoring for the fast-fashion, designer one-offs of stores such as H&M and Zara, and the cheap chic of players like Uniqlo.  <wwd.com>

 

Luxury Outlook Brightens - Down but not out, the luxury market is looking to new categories - plus female and older consumers - to boost its bottom line in 2010. That was one of the messages at the “Luxury Beyond The Crisis,” a conference organized by The International Luxury Business Association and held at the Hotel Westin in Paris Tuesday. New luxury categories - including technology, furniture, travel and spas - will help the sector register a 4 percent revenues increase next year, according to Jean-Marc Bellaïche, partner at Boston Consulting Group in Paris. Minus such categories, a 3 percent dip is projected for the sector, he noted. While luxury fashion brands are already rallying in Far East, Bellaïche said he is also optimistic about growth prospects in the U.S., where recent surveys suggest the awareness of luxury brands is less pervasive. “The U.S. is a growth market, but we still have to find the key,” he said. <wwd.com>

 

Recession-era Black Friday Filled With Challenges - After more than a year of recession fallout that made holiday 2008 a retail Waterloo, stores will put their austerity strategies to the stiffest test when the season moves into high gear on Black Friday. But the mood of shoppers is a stiff challenge, although after a year of tightened wallets and economic hardship, there is a perception of some pent-up demand among consumers that could benefit stores. (See story, opposite page). Lew Frankfort, chief executive officer of Coach, said consumers have been trained to wait for sales, and the response of retailers to that face-off will dictate the tone of the holiday. <wwd.com>

 

Free shipping remains the best bait for luring online shoppers, survey says - Online shoppers are cutting back on their spending and looking for free shipping offers and exclusive online deals, says a survey from The Conference Board and TNS. Another survey shows nearly a third of consumers plan to shop from work next Monday, and a third suggests many consumers remain concerned about using their credit card online, but will shop on the web anyway. Consumers who plan to shop online are being a bit more frugal, according to the survey from The Conference Board, a nonprofit management organization, and research organization TNS. The survey of 3,946 adults conducted Nov. 2-8 found: <internetretailer.com>

 

Sears.com begins shipping to 90 countries - Sears.com has begun shipping to consumers in 90 countries, including the U.K., France, Germany, Spain China, India, Japan, Argentina and Brazil. "We are excited to offer this new international shipping option to our customers," says Imran Jooma, senior vice president for online at Sears Holdings Corp. "With our large product assortment and the capability to ship products internationally, we hope to make shopping easier and more convenient, both for customers in the U.S. with friends and family overseas, and for international customers who would like to purchase products from Sears.com." <internetretailer.com>


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