Retail Stocks: Buy or Beware? (XRT)

Black Friday is the biggest day of the year for retailers but today was much more important for those considering retail stocks. The release of October retail sales from the government and earnings reports from 2 of the biggest merchants in the world marked the peak of the data deluge making this a perfect time to sift through the numbers and see what we’ve learned.

The data has been surprisingly strong given the dour reports about the mood of consumers. As my partner Matt Nesto pointed out, the 0.6% ex-autos retail sales growth reported for October was the best since last March. Even better, Nesto notes that the figure was 0.7%, ex-autos and gas, and up 7.4% from last year. The numbers were stellar, but Nesto, like many investors, dismisses them as a “data diversion” taking our tired eyes off of Europe and the government’s next carnival of ineptitude: The Super Committee set for later this month.

See the full “Breakout” segment below:

Related ETFs: SPDR S&P Retail ETF (NYSEArca: XRT), Merrill Lynch & Co., Inc. Retail (AMEX: RTH), PowerShares Dynamic Retail (NYSEArca: PMR)

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