Stocks rallied to new highs today on the strength of retail earnings reports. The Dow gained 117 points to close at 18,613. Trading volume however was very light especially on the NASDAQ. The current rally shows a breakout but with little conviction.
Macys Department Stores reported better than expected sales and earnings today sending shares sharply higher. The company however acknowledged that it is facing a secular downtrend in same store sales as more people “go Amazon”. Year over year number showed a 4% drop in sales and a 16% drop in profits. To counter the slow ebbing of brick and mortar sales Macys announced it will close 100 stores over the coming 12 months and use the savings to enhance online sales efforts. While this earnings report was positive for retail stocks in general it caused a knee jerk selloff in the REIT sector as shares of property and shopping mall REITs could be affected if more brick and mortar retailers shut marginal stores. Amazon continues to disrupt life in general.
Oil prices rose today after the International Energy Agency said that the oil glut has disappeared but it also warned that global demand growth was going to slow down from 1.4 million barrels per day to 1.2 million barrels per day. The news cheered the oil gurus who pushed the price of WTI crude up 4.2% to $34.50 a barrel.
Gold started the day higher then reversed as US markets chugged higher. Gold closed the day off $7.90 an ounce to $1,344 an ounce.