Cantor Morning News

August Same Store Sales will be released this morning. The all important Back to School sales do not seem to be providing any strength for August as Labor Day falls late this year and hot weather has hurt sales in denim and long sleeve shirts. There has been a lot of promotional activity to attract consumers and price competition has been fierce and that will most likely hurt margins. The silver lining is that many retailers have sold off over the last month which leads to better valuations in the group, but after yesterday’s strength any upside surprise may already be priced in the market. Furthermore, because of the move, the risk lies to the downside in retail as I expect only a few upside surprises as September’s comparisons get even tougher. Lastly, the main takeaway that I see from the companies that have reported and/or issued guidance for Q3 and FY 2010 is that their tone is cautious at best, as the breakdown is: 18 worse, 4 better, and 16 only within the prior range.

Macro/Technicals

SPX: 1080.29; +2.95%
RLX: 411.59; +3.75%

Leaders: CTT, GIII, BONT, OMX, ZQK, ABG, TLB
Laggards: CHRS, SKS, BGP, DMND, FLWS, NDN

Research Away

VITC ($5.60) Vitacost.com estimates lowered by Oppenheimer Oppenheimer lowers f10 EPS to $0.20 from $0.40 and f11 EPS to $0.45 from $0.70 citing uncertainty around operational issues, management/board changes, and competitive pressures.

NFLX ($134.92) Netflix initiated hold at ThinkEquity Target is $135.

Top Events/Earnings Calendar

Events

August Same Store Sales Release

Earnings

PRE: BTH, DLM, MOV

POST: HRB, ULTA, ZQK

Cantor Flows

Flows

Consumer Staples: CHD, DOLE, GMCR, HANS, JJSF, SLE

Consumer Discretionary: AN, ANF, BLOKA, BLOKB, DKS, FRED, FDO, MW, WMT

Consumer Services: ABTL, DGI

Disclaimer: Prepared by staff of Cantor Fitzgerald & Co. ("Cantor") and is for information purposes only. It is not intended to form the basis of any investment decision, should not be considered a recommendation by Cantor or any other person and does not constitute an offer or solicitation with respect to the purchase or sale of any investment nor is it a confirmation of terms. Any calculations and valuations presented herein are intended as a basis for discussion. Sources of information are believed to be reliable but Cantor makes no representation and gives no warranty that the information contained herein is accurate or complete. Any opinions or estimates given may change. Cantor undertakes no obligation to provide recipients with any additional information or any update to or correction of the information contained herein. This material is intended solely for institutional investors and investors who Cantor reasonably believes are institutional investors. Cantor, its officers, employees, affiliates and partners shall not be liable to any person in any way whatsoever for any losses, costs or claims howsoever arising from any inaccuracies or omissions in the information contained herein or any reliance on that information. Cantor may have positions in financial instruments mentioned, may have acquired such positions at prices no longer available, and may have interests different or adverse to your interests. No liability is accepted by Cantor for any loss that may arise from any use of the information contained herein or derived here from. This product may not be reproduced or redistributed outside the recipient's organization. Sources: Cantor Fitzgerald & Co., Reuters, Bloomberg, CNBC, Dow Jones, Marketwatch, Trade-Alert, and the Wall Street Journal. ***All eco data from Bloomberg and DJ