Ahead of Wall Street - December 6, 2012 - Ahead of Wall Street
06 Diciembre 2012 - 3:06AM
Zacks
Thursday, December 6, 2012
We have another reassuring read on the nation’s labor market
through a material drop in the weekly Jobless Claims data, which
sets us up for the November non-farm payroll numbers coming out
tomorrow morning. This indicates that the recent weak weakness in
the labor market was mostly due to the effects of Sandy. Elsewhere,
the European Central Bank meeting produced what the market was
expecting – no changes to interest rates.
But the over-riding issue for the market remains the unresolved
‘Fiscal Cliff’ debate and there is no substantive development on
that front at this stage. The opening positions from both sides
appear to provide enough room for some sort of a compromise in the
coming days. But the bottom line is that there is no ‘fresh’
initiative on either side to bridge the gap.
Jobless Claims dropped 25K last week to 370K. The four-week
average, which smoothes out the week-to-week volatility, dropped by
2.3K to 408K. The Jobless Claims data is not entirely where it was
before Sandy distorted it (it was in the 360K vicinity before the
storm), but the storm’s effects are steadily dissipating. Overall
though, the labor market appears to be in the same shape where it
has been in the pre-Sandy months, with weekly jobless claims in the
350K to 400K range. The monthly jobs numbers coming out Friday
morning will also likely confirm what we saw from the ADP jobs
report on Wednesday. Adjusting for Sandy, the average monthly jobs
rate likely remains in the 150K neighborhood at present – that has
been the pace consistently this year.
In corporate news, Lululemon (LULU) came out with
better than expected results for the third quarter, but it’s
guidance for the coming quarter raise doubts about the
sustainability of its growth trajectory. The retailer of high-end
yoga pants and other women’s athletic apparel guided towards same
store sales growth in the ‘high single digits’ in the fourth
quarter, which is a material climb-down from the red-hot growth
pace in recent quarters.
Lululemon’s sales per square foot of retail space has been in
comparable territory to such iconic brands as
Apple (AAPL), Coach (COH), and
Tiffany (TIF). The high-end specialty retailer had
the market all to itself for a while, but Gap
(GPS) has been making a determined foray into that attractive
market through its Athleta brand. The location of many Athleta
stores in close proximity to Lululemon’s may be just a coincidence,
but there is no doubt that Gap is targeting the same audience that
has loyally followed Lululemon thus far.
Sheraz Mian
Director of Research
APPLE INC (AAPL): Free Stock Analysis Report
COACH INC (COH): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
LULULEMON ATHLT (LULU): Free Stock Analysis Report
TIFFANY & CO (TIF): Free Stock Analysis Report
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