Retail Numbers & Jobless Claims...A Big Thursday

retail sales slumpAfter spending most of the day in the green, the Dow was able to make its way down into the red by the closing bell, closing down just over 9 points. Worries in the health care business due to increase in premiums led to a sell off the sector. Personally, I was surprised to see the selling close. Lately, a strong buying turn around has been the closing trend. At any rate, the closing was rather flat and was not too significant.

Tomorrow acts as a hearty day for economic data. The much anticipated retail sales number for February will be announced following the opening bell tomorrow as will initial jobless claims. If this isn't enough, we close the week on Friday with the fun unemployment numbers. Depending on the data, these next two days have been set up to either fuel a short rally or set up an aggressive sell off. Considering how stagnant we have been of late, surprising data (either for better or for worse) should be enough to wake investors up. Investors cannot afford to be as patient in 2010 as they were in 2009. A lot of money was made from 2004-2007. Considering that, many could afford to be patient with their portfolio. However, carrying cash for two straight years starts to weigh heavy for many investors.

The outlook for retail is already set pretty low for tomorrow, considering the bad weather that hit the US. So if we indeed see a very devastating number come in below the already low set expectation, watch out for a pretty strong sell off. If numbers surprise and actually beat expectations, I expect the exact opposite. For the buy side, I expect so see some better than expected numbers in online retailers. One person's problem becomes another person's success. Just as the weather may have kept many people away from the malls, you can be sure that many of those people were still buying, just online. Amazon, Ebay, and Overstock are just a few that I feel could produce some surprising earnings this quarter and get a small run for the time being.

The Fed will most likely look to keep rates low for the time being, considering the continual rises we are seeing in unemployment. One way to quickly kill momentum to a recovery is to hike up rates. As of now, many do not notice the impact that the 0% Fed rate does for the economy. Considering its arrival in 2008, it has almost become a standard part of the economy. However, even a slight raise in rates would shake the economy enough to cause for concern of yet another credit crisis. Considering inflation still remains a distant concern, I don't see the Fed making a move quite yet. Happy Trading.