The Daily Dose: What to Obsess Over Today

 | Jun 18, 2014 | 10:00 AM EDT
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Happy Fed day. I will be tweeting Janet Yellen's press conference live @BrianSozzi, so please join the fun. Before the party begins, let me share what should be focused on today.

From Bloomberg, after the May 21 Fed minutes release: "Minutes of the central bank's April 29-30 meeting released today in Washington showed Fed officials also discussed the need to improve their guidance on the likely path of interest rates. Participants agreed that 'early communication' of their exit strategy 'would enhance the clarity and credibility of monetary policy.'"

What I'm obsessing over: Does the Fed seek to drop a verbal bomb into the marketplace with stock prices still elevated, even as unrest in Iraq dominates the headlines? I can't stand thinking so short-term, but I am realistic that people are trading the news. The Fed could use the recent labor market improvement as a crutch to sound a bit more hawkish in the lead of its policy statement. This brings me to my next point, the Yellen speech factor.

Also from Bloomberg, after the March 19 Yellen press conference: "At her first press conference since becoming Fed chair in February, Yellen was asked what the Fed meant by 'a considerable time.' She said, 'You know, this is the kind of term it's hard to define, but, you know, it probably means something on the order of around six months or that type of thing.' That was a bit quicker than markets had been expecting, so interest rates rose and stocks fell."

What I'm obsessing over: By most measures (the stock market, for example) Yellen has recovered from this rookie gaffe. She has been consistently Bernanke-esque in her public commentary, soothing markets. However, crazy things tend to unfold when reporters hungry for page views ask questions to wicked-smart economists. Does Yellen stumble again? I am concerned that she does, and I am paying careful attention to any word or train of thought from her that doesn't fit squarely with the Bernanke Doctrine. If that word is shared, the market may very well stay down for the count near-term as it would be her second verbal miscue -- and correctly dictating policy is necessary as we turn the corner into 2015.

An Analyst Event to Watch

Coach (COH) has an analyst day scheduled for June 19. As someone who has covered Coach for seven years, I thought the inclusion of this analyst day was highly suspect, for the company usually does the investment-bank speaking circuit prior to its late July/early August earnings report. At this analyst day, Coach execs will wax poetic on current business trends, key growth opportunities, transformation initiatives and the long-term outlook.

With Coach shares down 5.5% in the past month into this stock analyst fiesta, the market is clearly yelling that the company is having another challenging quarter. Coach's North American same-store sales were down 18% in the previous quarter -- just jaw-dropping in and of itself, but especially against the 26.2% notched by rival Michael Kors (KORS).

Here are the signs I am seeing that Coach could be prepping to convey more bad news:

  • Full-price stores are no longer full price. In a new move, Coach has decided to run a semi-annual sale on its website and within its full-price stores. This was never the case (solely friends-and-family deals in stores), but seeing it amid the introduction of allegedly trend-right styles is a signal the customer remains uninterested in the brand.
  • The great Coach markdown plague has spread to key wholesale accounts such as Macy's (M) and Nordstrom (JWN). I am seeing online discounting across product categories in the range of 33% to 50% in a female handbag and accessories category that continues to expand.

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