Doors Floors and More

Cited: AP

On November 22, Wall Street got a boost from improved retail sales, but there is little hope for an enthusiastic holiday shopping season that could actually improve the economic recovery. The room by a surge in car sales, the October figures did exceed economists extra patience. However, because many consumers have a lot of debt and the rising unemployment, economists do not for see significant spending until well after the end of the year. Even optimists predict scant improvement over last year’s holiday season.

Consumer spending accounts for about 70% of total economic activity, so wary shoppers are a worrisome sign for retailers entering the crucial holiday season.

“U.S. consumers are no longer panicked, but they remain cautious,” said Mark Zandi, chief economist at Moody’s Economy.com. “They are spending just enough to keep the economy out of recession, but not enough to fuel a self-sustained expansion.”

Retail sales rose 1.4% last month, the Commerce Department said. But excluding a big rebound in auto sales, the gain was just 0.2%. Strength at general merchandise stores like Wal-Mart and Target was offset by sales declines at furniture stores, appliance stores and hardware stores.

Zandi said one telling statistic about household finances was that the number of bank credit cards in circulation has fallen 18% since the year began. That’s happened as banks facing soaring loan losses have tightened credit standards.

Consumer credit has now fallen for a record 8 straight months through September and households are struggling to manage their debt levels after the most severe recession since the 1930s.

Federal Reserve Chairman Ben Bernanke warned Monday of “important headwinds,” such as the weak job market and tight credit conditions. These forces “likely will prevent the expansion from being as robust as we would hope,” he told the Economic Club of New York.

On Wall Street, major stock indexes rose more than 1 percent to new 13-month highs after the retail sales figures were released. The Dow Jones industrial average jumped 136 points to 10,406 and the Standard & Poor’s 500 index closed above the 1,100 mark for the first time in more than a year.

The overall economy, as measured by the gross domestic product, resumed growing in the July-September quarter at what the government estimated was an annual rate of 3.5%. That was a sharp rebound after a record four straight declines in GDP.

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Analysts noted that the retail sales report Monday included a sharp downward revision to sales in September. The government also reported last week that the nation’s trade deficit rose in September by the largest percentage in a decade. As a result, third-quarter GDP is expected to drop to a more modest 2.8% growth rate when the government releases a revised estimate next week.

Growth for the current quarter is expected to be around 3%. But, analysts said, growth in the first half of next year could slow to around half that pace as consumer spending falters and government stimulus programs begin to wane.

Growth at such a weak rate would raise the threat of a possible double-dip recession. That’s especially true with unemployment, now at a 26-year high of 10.2% and expected to keep rising into next year.

“It seems unlikely that households will be able to spend more freely anytime soon,” said Paul Dales, U.S. economist at Capital Economics.

Retailers last week gave muted holiday outlooks as they reported third-quarter earnings. Wal-Mart Stores Inc. and Kohl’s Corp. both said they plan to discount aggressively. J.C. Penney said it expects sales for the quarter that includes the holidays to fall.

According to a Gallup poll released Monday, Americans expect to spend $638 on Christmas gifts, equal to record-lows from November and December of 2008.

Michael P. Niemira, chief economist at the International Council of Shopping Centers, expects overall holiday sales will rise about 1% from last year, a historically weak performance.

The big swing in overall retail sales activity reflected a recent roller coaster ride for auto sales. New-car sales surged in August as shoppers rushed to take advantage of the government’s Cash for Clunkers sales incentives, which expired at the end of August. Sales then plunged in September.

For October, auto sales jumped 7.4%, recouping about half of the 14.3% drop in September. The 0.2% increase in retail sales, excluding autos, was down from a 0.4% rise in September. It was the weakest showing since July.

Bernanke stated that banks dealing with the wreckage of the recession and bad real estate loans could slow progress in an effort to get credit flowing more freely when commenting on the economic outlook. The fact is that credit difficulties will hinder businesses who wish to expand and hire.

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My Take: I have been reading many articles about the recession. Most of those articles are very depressing. Whatever happened to hope? Why don’t some people write articles about increasing sales even if their miniscule. Inspiring people to look to the future with hope just might help the recession along a little bit more. Otherwise, were going to see something like what happened when the Great Depression started. People jumping out of skyscrapers because they cannot face what is happening.

That means that people will be spending money on funeral services and urns instead of buying Christmas presents. It is bad enough to have to buy pet urns when you lose a pet, but it is even worse when you have to buy one or family member. I, for one, do not want to think of how bad the economy is, I would rather think about how good it is getting!

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Cited: StreetInsider.com

Market, market has got the market? Is it Wal-Mart or Amazon? These two retail giants have been fighting competition within their own markets for a long time. Now, everybody knows that Amazon is the place to go for books and CDs or DVDs at low prices. But this holiday season Wal-Mart wants a piece of that pie.

Big-box discount retailer Wal-Mart (NYSE: WMT) and online one-stop shop Amazon.com (NASDAQ: AMZN) are engaged in a price war that could end up as the biggest story to come out of the busiest shopping season of the year.

The battle started last month when the two retailers began a highly publicized battle to see who could have the lowest price on the newest books and DVDs coming out this fall. Now the two are going back and forth on toys, video games and mobile phones.

In perhaps the most evident sign of the two trying to keep up with each other, Wal-Mart dropped the price of its Easy Bake Oven from Hasbro (NYSE: HAS) to $17 from $28 as a part of its Black Friday deals. Wasting no time, Amazon dropped its similar $28 sticker price for the Oven to a competitive $18. Now, parents will have an option on where to get a good deal the 45-year old toy that is certain to bring brownies undercooked by a light bulb into homes across the country this holiday.

The two companies are fundamentally different and Amazon poses no real threat to Wal-Mart and its 4,000 stores. Lately the lines that divide the two are becoming blurred. Wal-Mart is expanding its online services in an effort to not cede any of its sales, which last year totaled $405 billion.

Amazon is punching back as it now offers same day shipping on its merchandise in seven cities to give the consumer some of the instant gratification that they receive from shopping in a store. Amazon is also looking to increase profit margin with expanding its white-labeling program by branding products with the company’s image. Amazon is leading the E-Commerce revolution, which currently only holds 4% of the retail market share, but is growing rapidly among those consumers who would rather point and click, rather than venture to overcrowded stores.

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Among the items being tussled over by the two companies are video games like Call of Duty: Modern Warfare 2, which Wal-Mart started selling with a $15 gift card, an offer that Amazon soon thereafter matched. Similarly both companies are now selling Xbox 360 gaming consoles for $199 with a $100 gift card, as well as the new Palm (NASDAQ: PALM) Pixi phone for $30, $175 off retail price.

As the two companies continue to grow and evolve it is clear that the competition will continue. As for this holiday season, consumers will have plenty of deals to choose from as things heat up.

Shares for Wal-Mart are trading were nearly even on November 25, up 0.31% to $55.02. Amazon is down a fraction to $132.84. There is a significant difference between the core shoppers of Amazon and Wal-Mart were competing toe-to-toe on some items. The largest percentage of Wal-Mart shoppers earn $25,000-$45,000 a year, compared to over $100,000 at Amazon.

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My Take: It is good to see a little bit of competition between competing retailers. It means that consumers are going to get lower prices and will be able to afford the things they want. Consumers like college students do not have much money will be able to afford their Greek clothing this year. It also means that they will be able to get cool tees as from as gifts for their friends or family this Christmas.

Of course, some college students will be entering fraternities or sororities and will need to get a Greek shirt for next semester and with this kind of competition they will be able to afford it. They will also be able to afford some new cool T shirts for next summer.

Don’t get me wrong, students will not be the only ones who will benefit from the price wars this holiday season. The low prices on books and DVDs are just beginning. If the competition heats up more, you will see lower prices on electronics, toys, toiletries and even some of the frivolous things like Scentsy wickless candles. I know, women are the ones that usually light all the candles in the bathroom and then soak in the tub to relax. Some men do it as well! Of course, they will need the Scentsy candle warmer for these candles, they have no wick.

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Holiday Advertising

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Cited: Wall Street Journal

Black Friday has been considered an important indicator of retail sales during the holiday season for many years. However, this year the following Monday or cyber Monday may provide important information on how the stock market will perform the remainder of the year.

On Friday, November 27, stock market trading volume will be particularly weak and it will be difficult to get a clear reading on how much spending consumers are actually doing. But by Monday, preliminary reports of retailers’ sales on Black Friday and throughout the weekend will have been released, and they are likely to become a big driver of Monday’s stock-market action. Using history as a guide, Monday’s trading is likely to indicate what the stock market will do the rest of the year.

This year, holiday retail sales have become an even bigger focus for investors than in the past. With the consumer-discretionary sector of the S&P 500 having climbed 34% so far this year despite a 10.2% unemployment rate, investors are looking for the consumer’s behavior this holiday season to either justify the rally so far and indicate more gains may come, or show that it’s time to get out.

“Black Friday is critical,” said Michael Alpert, a portfolio manager with Seligman Investments. “Black Friday is really where we’ll get a sense of how strong the consumer feels and if the 90% of consumers still employed are still going to go out and spend.”

According to Schaeffer’s Investment Research, looking at the past 40 years, the Dow Jones Industrial Average has climbed from the close of the Monday after Thanksgiving through the end of the year 75% of the time that the Dow was positive on that Monday after Thanksgiving.

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The average return over that period was 2.5%. Whenever the Dow fell on that Monday, it still rose from then through the end of the year 61% of the time, but 61% isn’t nearly as strong as 75%, and the average returns during those periods were a weaker 1.78%.

The connection is even stronger in recent years, when more accurate data became available sooner after Thanksgiving. In the last 10 years, when the Monday after Thanksgiving was positive, stocks rose through the end of the year 100% of the time.

The National Retail Federation released survey results Wednesday that showed up to 134 million people are expected to shop this Friday, Saturday or Sunday, higher than the 128 million people who said they planned to last year. In addition, Andrew Beck, portfolio manager at Aston/River Road Asset Management, said he wouldn’t be surprised if the sales results from this weekend beat investors’ expectations, which would be good for stocks through the end of the year.

Still, Mr. Beck said, “that’s only because expectations are so low and comparisons to last year are easy.” He added that regardless of how the retailers do this holiday season, valuations are no longer that attractive, which prompted his firm to recently sell its holdings in Polo Ralph Lauren Corp. and Abercrombie Fitch Co.

Nevertheless, many participants are waiting for this weekend’s retail sales to decide how to position their portfolios for 2010.

“Given the appreciation that we’ve seen among a lot of these consumer-oriented stocks, investors are paying more attention,” Mr. Beck said. “You’re more sensitive to what’s going to happen in the holiday season to make a decision of ‘Do I want to hold this position into the new year, or not?’”

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My Take: Well, it seems logical that the following Monday would be a better indicator of not only stock prices but retail sales. Many people do not want to fight the crowds on Black Friday. There are a lot of people who will stand in line for hours just to get a good price on a pair of low rise jeans for Christmas present. I, myself, would rather we go online and get a better pair of skinny jeans and take advantage of the convenience of doing it for my own home.

However, many people feel that Black Friday is the best day offer sales and lower prices. They can find the makeup and natural skincare products if they want at lower prices. Or maybe they’re looking for sales on Hugo Naturals shampoo. If they would only realize that they could probably get the same items online at a sale price, they would not have to wait in line for so many hours.

Some online retailers can provide some beautiful custom gifts at sale prices. In fact, I know one online retailer that sells personalized custom gifts at good prices. I believe that online retailers are going to take advantage of Black Friday just as well as in-store merchandisers. So I do think that Monday will reveal a lot after the weekend.

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Cited: CNN Money

The unemployment insurance bill that was signed by President Obama on November 20 be giving businesses a break. They will have a chance to turn some of their losses in the cash with a temporary expansion of attacks manager that is often used. Of course, another tax break will be put on hold to pay for it. This will allow businesses to turn recent losses into cold cash.

The bill will let all businesses apply their losses from either 2008 or 2009 to any five years prior to 2008. By doing so, they can get a refund from the IRS on the taxes they paid for those five years. A loss is defined as the amount by which a company’s tax deductions exceed its gross income.

Under current law, the so-called “net-operating loss carryback” is only allowed for two years. There are only two restrictions to the new provision. The first is that no business that has accepted funding from the Troubled Asset Relief Program (TARP) would be eligible for the break. And the second is that any refunds for taxes in the fifth year would be reduced by 50%. The provision is estimated to cost $10.4 billion over 10 years, according to the Joint Committee on Taxation.

Businesses have been angling for this break throughout the recession. And they expected it to come a lot earlier. A similar measure was proposed for inclusion in the $787 billion stimulus package passed in February. But it ended up being watered down so that only small businesses with gross revenue of $15 million or less could qualify.

While those small businesses represent about 98% of companies, they only represent roughly 5% of taxable income, said Clint Stretch, managing principal of tax policy at Deloitte, at the time. Not surprisingly, the estimated cost of that provision in the stimulus bill was considerably lower, just under $1 trillion.

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Who is likely to benefit most?

While most businesses have suffered during the downturn, those in the hardest hit industries are going to enjoy the biggest break.

“The homebuilders and banks that have never taken TARP money are the most obvious beneficiaries,” said Anne Mathias, director of research at Concept Capital’s Washington Research Group, in a research note.

But she also noted others in line to benefit include semiconductor companies, materials companies, retailers and print media companies. While an overwhelming majority of lawmakers voted for the overall bill, not all lawmakers are happy with the provision.

Calling it a “corporate giveaway, Rep. Lloyd Doggett, D-Texas, said, “This is a textbook example of how not to deal with the economic challenges facing our country,” according to a CongressDaily report.

A supporter of the provision, House Ways and Means Select Revenue Measures Subcommittee Chairman Richard Neal, D-Mass, said it would help businesses hard up for cash. “It will provide quick capital at a time when it is nearly impossible to find,” Neal said.

The quid pro quo

One way the legislation seeks to pay for the cost of the tax breaks is to delay the implementation of a tax relief provision for multinational companies that was supposed to be enacted in 2011. Under the bill, it will now be enacted in 2018. The tax relief measure is intended to create more of an incentive for multinationals to invest in the United States. And the way it is structured it would benefit financial services companies the most. The delay in implementation is expected to raise $20.1 billion over 10 years, the JCT estimates.

Multinationals aren’t happy about it but they haven’t fought the measure because “they have bigger fish to fry,” such as the potential loss of their ability to defer paying U.S. tax on income they haven’t brought back to U.S. soil, said Joanne Thornton, director of international research at Concept Capital, in her research note.

There is also a possibility that the delay in the measure could become permanent in part because it will be a tempting revenue raiser to pay for other legislation. The House health reform bill, for example, already calls for a full repeal of the multinational tax relief measure for a savings of $26.1 billion over 10 years. Now, Thornton said, “there will be a $20.1 billion hole in the health care bill.”

Lawmakers already proposed another measure in anticipation that the bill would pass that would compensate and potentially raise nearly $24 billion. However, negotiations are still taking place to get the legislative language in line that could reduce how much will be raised for the measure.

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My Take: You know something, every time they pass a new “Bill” they keep telling us that it is going to save money and in the long run it usually costs more money. This falls into the vicious circle of costs.

By that I mean, that every time prices go up, it takes forever for the paychecks to follow. The cost of everything goes up very fast. However, wages do not follow suit very quickly. It is no wonder that people cannot afford anything in today’s society.

Complaining about your custom payroll program has no affect on your wages. All they really do is keep track of your time and attendance and not how much you get. You need to complain to your boss about how much you make. But of course, as with many bosses, they are more concerned about their credit card processing and how much money they make. In fact, your company is probably worrying about your business merchant account because your sales are down.

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Gifts for All

Not everybody wants a wood propeller or any aviation gift for that matter, a brass bell, lake house signs or even the coolest hockey gift there is. These best sellers only scratch the surface of what you will find at one retail website. But they are pretty sure you will not find such an eclectic group of nostalgic products anywhere else like tin signs.

Automobile Insurance Quotes

In the old days, before the luxury of the internet, you were forced to go to or call an insurance agent’s office in order to get auto insurance quotes. This is an extremely inefficient way of getting a good deal. Auto insurance premiums differ greatly between companies. You could go to one agency and be charged 30% more than another company, even for the same driver! Getting quotes online is a simple and free way of solving this issue. All you have to do is compare car insurance quotes online by fishing around for the best deal.