THE HEADLINE: Macy's Plummets 17% After Cutting Guidance As Retailers Tumble
MATASII SII ANALYSIS: FEBRUARY 20, 2017 CALL: Macy's has seen a hard sell off in 2015; 2016 to present day has had the market correcting from that fall. Recent support can be seen at a long term weekly blue s/r zone. Currently watching to see how far the next lift will be: we can see significant swings from the current consolidation. IF the market continues to lift, it could move back to pattern resistance; breaking this would have us looking up to the blue s/r zone that has held the current consolidation. IF the market were to break this then the next levels can be seen at the blue dashed Fibonacci retracements.
A break down below recent lows and in to the blue s/r zone below the market could see drop to the bottom of the zone. As well as the bottom of the blue z/r zone, pattern support can be seen nearby: breaking through these could see further drop to the next blue s/r zone, continuing the larger drop down from the highs in 2015.
The daily chart shows more detail, each technical offering an opportunity to move to the next technical when the current is broken. Orange lines highlight potential trigger considerations, orange arrows offer potential moves to watch for.
Initial Chart Supporting Above Analysis:
THE BREAKING NEWS STORY:
Macy's Plummets 17% After Cutting Guidance As Retailers Tumble
One week after Apple stock crashed when the company cut its revenue guidance for the first time in 16 years, today it's the retailers fault to pull the rug from under investors when first Kohl's then Macy's slashed guidance following weak holiday spending, crushing the narrative of the "strong consumer."
After this website repeatedly warned that the massive inventory buildup that helped boost Q3 GDP was unsustainable and would result in major liquidations and matched earnings drops not to mention a sharply weaker Q1 GDP...
... today Macy’s confirmed just that when the giant retailer cut its 2018 guidance, saying the company will continue to take necessary steps in January to "ensure a clean inventory position". As a result, Macy’s now sees adjsuted year EPS $3.95 to $4.00, down from $4.10 to $4.30 previously.
Macy's also reported that November and December owned comp sales were up 0.7%, also missing expectations.
As a result of the sales miss and guidance cut, Macy's shares imploded in early trading, dropping as much as 17% premarket. This is what 16 years of buy and hold... and make no profits looks like.
Macy's wasn't alone. Because shortly after Target reported ok number, Kohl’s defecated all over the bed and its shares plunged 8% after the company reported Nov. and Dec. holiday-period comp sales rose 1.2% on a shifted basis, much lower than its prior year holiday sales growth of 6.9% and falling short of Wall Street est. of +1.5%, cut from +~2% on Jan. 4.
The abysmal numbers from M, L Brands and KSS dragged down the entire department sector space with J.C. Penney and Nordstrom also falling in pre-market trading, and even Target was down after earlier reported holiday comps. up 5.7%, stronger than expected, as suddenly the narrative of the strong US consumer is once again on the rocks.
In light of these disappointing spending numbers, it is almost as if the market not only leads the economy, but a sliding market crushes US consumer spending intentions.