Same-store Sales Come In Mostly Better Than Expected

The December same-store sales reports for retailers look mostly better than expected, and the stocks are reactive favorably. The overall market is lower, but the retail sector is in positive territory.

Here are some of the better-than-expected reports I saw, and how much sales rose for each:

• Aeropostale: +10.0%
• American Eagle: +7.0%
• Children's Place: +4.0%
• Costco: +9.0%
• Kohls: +4.7%
• Nordstrom: +7.4%
• Saks: +9.9%
• Target: +1.8%
• TJX: +14.0%

In economic news, the jobless claims were again better than consensus estimates, raising hopes that tomorrow's jobs report will be a good one. The Monster Employment Index also showed the most modest rate of decline in recruitment activity in the last 18 months.

Asian markets were lower overnight, after China's central bank unexpectedly raised rates there. The Shanghai Composite fell -1.9% on the news.

The dollar is bouncing today, and that is keeping a lid on commodities. Both oil and gold are lower, but not by that much, following yesterday's gains. Oil is near $83 while gold is still hovering around $1131.

The 10-year yield is flat right now at 3.80%, and the VIX is slightly lower to the low level of 18.97. I think the VIX is poised to spike higher in the near-term, but I also feel that over the next several months it will spend most of the time trading in the teens, which will confound many of the bears who will claim it highlights too much complacency.

Trading comments: The market is showing its resiliency again by not giving back too much of Monday's gains over the last couple of days. I have mentioned the overbought condition, but it is possible to work off that condition by going sideways as well.

AAPL and GOOG have been correcting this week, and while some may point to that as a sign of weakness for the overall market, I think it is a good think. I don't want these stocks to runup too much ahead of earnings, and I think a pullback here offers a decent entry to add to these positions ahead of what I expect to be very good earnings reports for both.

long AAPL, GOOG