On Tuesday, inflation was rising and putting pressure on the consumer as we headed into a big week of retail earnings reports.
Then on Wednesday, CNBC’s talking heads changed their minds and said it was easing up.
Source: CNBC
But Bloomberg is clearly still on the inflation train…
Source: Bloomberg
By now, you should know you can’t trust mainstream financial media when it comes to making your money decisions, let alone pick a retail earnings trade for November 2021.
Polite reminder: These journalists have no idea why the market does what it does. All they’re doing is playing you to see what you’re most interested in — bullish or bearish stories.
I prefer true stories.
I mentioned on Monday that the monthly options expiry could affect this week, and it’s certainly looking like a drag thus far despite the fact that earnings have been solid.
And those companies who avoid saying anything negative during their calls have been faring better than those who say anything that sounds like a hedge to analysts.
A Retail Earnings Trade for November 2021
One such retailer was Shoe Carnival Inc. (Nasdaq: SCVL), which posted a 13% beat on revenue and a massive 42% beat versus earnings per share expectations.
Wednesday’s action took the stock all over the place… up 3% at the open… then down 10% from there before finally finishing the day close to even.
Source: Bloomberg
I bring this up because if this company can crush earnings, the higher-margin shoe company on our watchlist — Caleres Inc. (NYSE: CAL) — will likely SMOKE them after close on Thursday.
Before pulling back during September’s delta variant scare, North American retail traffic had surged. Now it’s surging again as we head into the holiday season.
Source: Bloomberg
And Google mobility data is showing improvement once again around workplaces.
Source: Our World in Data
Going back into the office requires a little wardrobe updating, and that starts with shoes.
So for your FREE retail earnings trade for November 2021, let’s pick up a little CAL — no more than a tenth of any intended position — and see if it can get the sector up and running again.
All the best,
Matt Warder
Fortune Research
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