1 Macro Report That Predicts the Future

This morning, the U.S. Department of Commerce published its monthly retail sales report. A sneak peek for investors before earnings are released, this report paves the way for a positive quarter for retail. Ditch your Ouija board and read below to connect the dots between macroeconomic analysis and your portfolio's performance.

What goes down must go up
In what was expected to be another month of measly sales, the retail sector surprised analysts by rising 0.8%. In the largest increase in six months, sales for all components improved significantly. Seasonally adjusted earnings paint an even brighter picture, with sales up 3.7% from last June.

Online shines, clothing folds
Some of the biggest winners for July are nonstore retailers, up 11.8% in the past month. This component makes up less than a tenth of all retail sales -- but has been kicking retail's tail for the past six months. While department stores, gasoline stations, and electronics stores have been stuck in the red, all other subsectors have seen positive sales over the past couple months.

We've seen (Nasdaq: AMZN  ) ride this wave of consumer confidence, boosting seasonally adjusted sales and bumping its stock up 30% in the past six months. On the darker side of retail, J.C. Penney's (NYSE: JCP  ) sales and stock have fallen despite CEO Ron Johnson's best efforts. In Q2, J.C. Penney lost $147 million -- almost triple what analysts expected.

US Retail Sales Chart

US Retail Sales data by YCharts

Start your engines
Auto sales jumped in the past quarter, rising 8.7% since May. Automotive innovators like natural gas engine manufacturer Westport Innovations (Nasdaq: WPRT  ) and electric car manufacturer Tesla Motors (Nasdaq: TSLA  ) both saw their stocks slump in the first half of the year. However, as this retail sales report validates, the auto industry is revving up for a positive 2012 finish.

US Retail Sales Chart

U.S. Retail Sales data by YCharts

There be dragons!
July's retail sales report comes as a relief to a market and economy plagued with bad news, but take heed, ye of macroeconomic faith: Macro trends are no replacement for careful company analysis.

Nonstore retail sales might be on the rise, but Groupon's (Nasdaq: GRPN  ) stock has dropped 70% this year because of its monetization woes and increased competition. Likewise, auto giants Ford and General Motors are still down 22% and 15%, respectively, this year.

July has been a good month, but pulling back, it has been tough times for consumers and retailers alike. The Motley Fool has prepared a special free report outlining exactly what you need to know about the changing face of retail. It's as free as this article and available for a limited time only, so grab yours today.

Fool contributor Justin Loiseau has no material interest in any companies mentioned in this article, but he did use Groupon to get cheap tickets to a Nationals game. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.

The Motley Fool owns shares of Tesla Motors, Westport Innovations, and Motley Fool newsletter services have recommended buying shares of Tesla Motors,, and Westport Innovations. The Motley Fool has a disclosure policy.
We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 16, 2012, at 3:39 PM, djkumquat wrote:

    the price at the pump dipped significantly in july. i'll wait for revised numbers and a return to new normal pump prices before getting too excited about any retail numbers.

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