Why Best Buy & Weak November Retail Sales Don’t Matter

Jeff Macke

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You could have heard a pin drop in Breakout's Global HQ this morning as we awaited the Commerce Department's release of advance monthly retail sales for November 2011. We already had Best Buy (BBY) earnings miss this morning, presumably setting the stage for some "big huge takeaway" regarding the consumer and the Holiday Season.

Then the numbers came out. Nesto and I raced to the data and about halfway through the process, something occurred to me: I simply don't care. The November retail sales headline was a 0.2% rise, plus or minus 0.5%. The plus or minus fudge is in the very first sentence of the release. As a tip, when you're furiously pouring over a preliminary figure from the government and the margin of error is greater than the number itself, you've gone from "wonky" to "in need of finding a life."

Here are the takeaways from retail sales and Best Buy:

The discretionary portion of the numbers (department stores, "non-store retailers") seem to be relatively good. "Miscellaneous store retailers" were down 1.2%, suggesting a tough month for tchotchkes.

As for Best Buy, it's still a big box anachronism that should convert the middle of its stores, where albums, DVDs and CDs were once sold, into skate parks.

Even my co-host Nesto, who I delight in painting as a Santa-hating Grinch, couldn't put a frowny face on the incremental negative data. He "wants to look at the whole season" and pronounces the shopper to be the big winner; a point on which we agree.

The losers from this data are the traders spending their days guessing what the markets "should" do. Stocks are hanging in just fine today despite the data or because they're resilient, depending on your news feed. If you get your news from me and you're unduly worked up over what we've heard today: Merkel's body language, British PM Cameron's unwillingness to throw his country under the economic bus or anything else, I can offer you the opinion that it's simply time to back up and get ready for vacation.

For whatever it may be worth, and NOT as advice, I'm long-ish stocks, eyeballing the 200-day moving average on the S&P 500 for signs of a Santa Rally and heckling the image of Jon Corzine on my television. I'm not switching my inventory from heavily long to short at this point regardless of incremental data points or how tightly defined the range.

If you want something to do buy me a Christmas present or chat with me on Twitter @JeffMacke. I may or not amuse you but I don't charge you commission.

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