Courtesy of Blain.
Friday the 13th was not kind to the bulls. Indexes opened near unchanged and held there through the morning but the afternoon brought lots of selling. The S&P 500 fell 0.85% while the NASDAQ dropped 0.41%. April retail sales rose 1.3%, topping expectations. Over the past twelve months, total retail sales rose 3%. So today we had a market that could not hold gains after good news – that is a bad sign.
Soon after the opening bell “the market took that smile and turned it upside down,” said Kim Forrest, senior portfolio manager at Fort Pitt Capital. According to Forrest, Friday’s data failed to assuage investors’ worries about the future of traditional retailers, particularly as they are falling flat in the battle for apparel sales against e-commerce juggernaut Amazon.com, as is evident in their recent earnings
So if you have been reading along all week you would note today we had a nice retail sales number but earlier in the week we had rotten news out of brick and mortar retail companies – Yahoo News has a story on the mass migration to the internet for retail.
“In light of Amazon and Macy’s Inc.’s recent results, we feel more confident that Amazon will displace Macy’s as the number one U.S. apparel retailer by 2017,” Cowen & Co. wrote in a Wednesday note.
We’ve been cautious for a weeks now and there is nothing telling us to change that stance. The S&P 500 fell through its 50 day moving average and the NASDAQ is breaking below our trend line in blue. We noted earlier this week the more times a support level is tested the more apt it is to be broken and this looks to be the case here. A break below that 2040ish level set the week prior on the S&P 500 would bode ill next week if and when it happens.
And the horrible action in the retail sector continued with Nordstroms (JWN) joining the party.
JCPenney (JCP) fell after the company missed quarterly sales estimates as same-store sales fell way below expectations.
We missed the Kohl’s earnings story earlier in the week – there were too many sad earnings stories this week to cover!
The best sector this year has been utilities (XLU) which is a sign of caution; this is an area people go for yield and to be conservative.
On the positive side, Nvidia (NVDA) shares jumped 15% after the company’s profit rose 46% in the latest quarter as the chip maker saw strong growth in gaming products as well as newer sectors like automotive “infotainment.”
Shake Shack (SHAK) gained after the company swung to a better-than-expected profit for its first quarter, boosted by strong same-store sales and new location openings, leading the chain to raise its annual guidance.
Have a good weekend and go visit your local mall; they need your help!! 
