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A Blue Christmas For Retailers
-- December 16, 2002
The stock market may have enjoyed a Santa Claus rally today, but the nation's retailers aren't in a jolly mood. That's because consumers continue to rein in their spending for the upcoming Christmas holiday. Retailers are busily lowering prices to try to lure shoppers into their stores. Meanwhile, industry analysts are quickly lowering sales estimates for the holiday season. And we expect company earnings to come in well-below par, as well.
And when this happens, we fully expect stocks to give back all of today's gains ... and then some. After all, consumers drive two-thirds of the nation's economy. So, when consumer spending doesn't growing steadily, the economy suffers.
Right now, investors are being foolishly optimistic about this economy's chances for a quick recovery. When their rose-colored glasses come off, stock prices will come down.
Retailers Hope For Last-Minute Sales