Retail Won't Stay Down Easily

 | Feb 06, 2014 | 2:54 PM EST
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Kohl's (KSS) tells you something. So does Ann (ANN), and so do Costco (COST) and L Brands (LB). These say, wait a second, things are bad, they just aren't that bad.

And that's real important.

Retail led us down. It's where this whole selloff started. The selloff was deserved.

The holiday season simply didn't cut it. The weather was bad. The calendar was bad. Everything was bad.

The stocks were killed. Justifiably.

Now, though, we have to ask ourselves, has the negativity gotten too great? Were we too hard on the group, when even the weather didn't crush these companies?

Take a look at Ross Stores (ROST) and TJX (TJX). Those stocks have been terrible, and that is particularly galling for TJX, which has executed perfectly.

We know that Macy's (M) did well, but then they started hammering that one too! Now it is coming back, and I think it can easily rally another couple of points if we get anything half decent on the employment number tomorrow.

It would be totally realistic to expect that after the bloodletting in GameStop (GME) and Best Buy (BBY) and Target (TGT) -- the ones that were annihilated -- we could get that bounce.

Oh, and it isn't just retail. The restaurant stocks have been roaring. Starbucks (SBUX) had gotten laid to waste. It's springing back. Panera Bread (PNRA), where I am worried, is rebounding, and McDonald's (MCD) is now back to where it was when it reported a crummy quarter.

Maybe these stocks will give up their gains tomorrow on a too-weak employment number, but I think it is too late to be negative now.

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