Holiday forecast
Interview: Planalytics---Walsh, Paul---Analyst (slow)
>> all right. a es look at the stocks moving in afterhours trading right now. all these companies can report their latest financial results after the close of regular trading. web hosting company―let’s see. we have macromedia there, plunging 14% in extended trading. shares of at&t wireless heading the other way. they’re down a full 8% here, heading in the equal direction, i should say there. why don’t i just give you what they’re doing. mercury interactive is down with a 6.8% drop. computer associates dropping 4.6%. flextronics and electronic arts both losing 4% in extended hours trading. what we’re trying to tell you here is these stocks all reporting after the close and we’re seeing all same thing t reds arrows down as these stocks decline. in the meantime, we want to run down the numbers on how the markets closed ahead of these numbers. the dow jones industrial average showing us a loss of 149 points at 9598. the s&p down 15 points at 1030. the nasdaq composite lower by 42 at 1898. big board volume, 1.6 billion shares. it was a busy day. and losing stocks , stocks dropping more than 2,000 for every 800 that were advancing at the nasdaq there. similar number you saw there at the new york stock exchange. all right. the wilshire 5000’s, broadest measure of the market, tells us the same, downwards by 1.5% and the 10-year note is up 23/32, 4.25%. five year note―well, it was on the move higher as well. now we’re looking at currencies and how they’re trading on the pacific rim. all right. well, we regroup t. s&p 500 retail index is up more than 39% since the beginning of the year. changing weather patterns have helped fuel weakness in the retail industry this year. our next guest says as we approach the crurebling holiday shopping season, some may be able to benefit from the chilly fall and wintry wertsd for that’s what we expect. we’re joined for the holiday forecast. welcome.
>> thank you.
>> can you really see into the future that far? and i’ve spoken to meteorologists that say four days, max, five days you’re pushing it. can you make prediction of what we’re going to see for the holiday season?
>> absolutely. we’re not looking at the specific weather. we’re looking at tremendouses and trends compared to last year. we’re not giving you the same kind of weather forecast that you get from someone on tv. but we can forecast pretty accurately which way the weather will move and by understanding what that does to retail―or to customers, we can then give retailers a heads-up as to how they should be positioned to get in front of that movement.
>> how has this worked in the past? have you seen this follow through on your trends that your expectation for colds weather here or warm weather here lead to what benefit to whom?
>> well, just to use the most recent example, the month of septs. september is a highly weather impacted month, meaning changes in weather. do change retail results. it’s early fall, when it turns cold, people buy sweaters. if it is not cold, they don’t buy sweaters. this september, overall, was much colder than last year. in fact, it was colder than normal. for most retailers, the last fiscal week of the month was one of the coldest weeks we’ve had in five years. the result was we had one of the strongest septembers overall in retail for the past probably 60 months and a large part of that was because the weather favorability was such that it was driving people into the store to buy the things that people were selling.
>> it was also delayed back-to-school buying. we didn’t see as much as some people expected. a lot of that buying was done at the end of september.
>> absolutely. you buy for need. you don’t need to wait and plan it for a purchase because you don’t need to --
>> let’s talk about the areas that you favored this holiday season, related to the weather.
>> sure.
>> what are you looking forward to as being particularly strong?
>> overall, we think the weather will be a net-positive for retail. we think that the biggest benefit factors will be specialty apparel retailers, especially off the mall specialty retailer, mass merchants as well as department stores will get a lift from the weather. most of the lift for the seasonal good items will happen the last couple of weeks of the season. first couple of weeks, the weather will be milder than last year. there will be futurer instances of snow. therefore, traffic will be up and there will be greater purchases of nonseasonal good like electronics.
>> mm-hmm. we’re talking about electronics, a number of electronic and home entertainment devices are used when it is colds and nobody wants to go outside. is that the expectation? do you think people will play it that way?
>> no, but what does happen is when the weather―and the wintertime is relatively dry, folks are able to actually get out and go shopping. but if it is relatively warm, there is not a needed to buy seasonal good, therefore, there is not reason to buy a coat or scarf or gloves. gift items start looking a lot better.
>> let’s talk about what you expect to be tougher here. who stands to lose the most here if the weather is as you predicted will be?
>> i think overall it will be good for everybody. but if you look at the shopping season, and by that, thanksgiving through christmas, the first couple of weeks will be relatively soft for apparel retailer thes. it will be warmer than it was last year. therefore, demand for seasonal good will be down. therefore, softness early for apparel retailers, strength for electronics.
the back half is where it will be very positive for apparel retailers and mass merchants and that’s why the overall strength for the season.
>> all right. we look forward to that, see if that prediction comes true. >> absolutely.
>> meteorologist paul walsh.
>> thank you, lane.
>> coming up next, still much more. treasury secretary snow toured the chicago board of trade today and talked about the dollar and interest rates. that story coming up when we return. stay with us.
