The Daily Dose: Here's What to Watch

 | Jul 08, 2014 | 9:00 AM EDT
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What, the value of stocks actually fell on Monday?! Pretty crazy. I thought stock prices only rose. Eek, I must be getting complacent.

I suppose assorted whales in the market received advanced copy of the slightly more hawkish Fed minutes set for release this week and decided to trim profits. Come on, you know this stuff goes down.

The only thing of relevance I found on Monday in a slow start to the post-July 4 weekend was the plunge in the Russell 2000 (FYI, I hope you took to heart my mention a few weeks ago of more packaged food M&A -- it continues to play out). Giving back its gains related to the hot jobs report and then some, the small-cap Russell now needs to be watched carefully; another large session in the doldrums would be a red flag ahead of domestic focused earnings reports this week from the likes of Wells Fargo (WFC), Alcoa (AA), and Family Dollar (FDO). I expect a very poor quarter from Family Dollar.

Moreover, I just don't look kindly on this action amid investment banks pulling forward their timelines for interest rate increases. It goes a long way in showing that the market is where it is only because of liquidity, not the fundamentals of its component companies.

Behind the Scenes Notes

I am giving a presentation to a noteworthy company today. Compiling notes, it definitely became clearer who really is starting to win the battle for sales online among retailers. There are so many positive stories out there in retail land regarding mobile besides Starbucks (SBUX) – speaking of which, I believe we are looking at a sizable dividend increase from Starbucks within the next six months; maybe in excess of 20%.

Here is a mini wrap up of the top names:

  • Macy's (M): Has led in order online, have it shipped from its stores. Great way to maximize the sales potential of the company's website and focus on localized inventory. The company's online sales growth has been stellar, and well ahead of almost any retailer on, or off, the mall.
  • Best Buy (BBY): Has recently gone live with shipping from store for online orders at 1,400 of its U.S. locations. Basically, Best Buy now has 1,400 distribution centers, a huge advantage relative to Amazon (AMZN). Best Buy's online sales have been expanding rapidly the past few quarters.
  • Walmart (WMT): Has also been shipping from store for online orders and could also order online pick-up from store. The company needs this work to boost its same-store sales, which have been very week. The trick is to get people to buy online and visit the store. Further, the new, smaller Neighborhood Market stores, and shortly Walmart to Go stores will serve as distribution centers.
  • Honorable mention: Gap (GPS) has gone live with order online, reserve in store. Could pick up the reserved item in about an hour. 

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