1. Future Fed Chairwoman Yellen inspires stimulus hopes
Markets continue to weigh good economic news with the possibility that the Federal Reserve will turn down its stimulus policies. Is the economy strong enough to continue growing without the Fed? Investors are asking the question, but they will be more focused on Janet Yellen, who will testify before the Senate Thursday in advance of the Senate's vote on her candidacy for Fed chairman.
She's called the Fed's "dove" not because of her snow-white hair, but because of her soft and accommodating monetary policy views. As opposed to monetary "hawks," who are strict protectors of the integrity of the U.S. dollar and fighters of inflation, doves are willing to loosen the dollar supply in hopes of increasing economic activity and a boost to employment. Yellen's writing and speeches reflect a mighty economist who cares about one issue above all -- unemployment.
Yellen = Bernanke? Yellen is expected to continued the policy of her predecessor, Ben Bernanke (she was his top deputy, after all). Market makers will watch closely Thursday as senators grill Yellen like a 4th of July bratwurst. Her testimony will reveal nuanced implications of how she will handle the economy and how she will influence interest rates. All of Wall Street, most of Main Street, and everything with a dolla' dolla' bill sign written on it is some way or another is affected by interest rates, so the fact that this is the first new Federal Reserve chairman since 2006 is a big deal.
2. Macy's earnings lookin' good
You know what's in style this season? The financial statements over at Macy's (NYSE:M). Shares of the department store legend popped 9.4% Wednesday on news that Macy's earned $177 million last quarter, as revenues rose 3%. Those kinds of numbers are good enough to earn Macy's the biggest balloon in its own Thanksgiving Day parade.
Advertising is the new black. Macy's has been using early holiday ads, its new mobile app, and fancy QR codes to push its diversity of fashion lines, including celebrity ones for Martha Stewart and Donald Trump. It's annoying seeing Christmas commercials when you're watching preseason football in August, but apparently it's been paying off.
The takeaway is that Macy's is seen as a solid barometer for how middle- and upper-middle class Americans are using their dough. Although retailers struggled a bit this past summer as Americans held back from spending, Macy's has rebounded strongly, as its strategy to target specific merchandise for each of its stores' particular markets pays off. That's a trend that apparently everyone over at struggling J.C. Penney seemed to miss.
3. Potbelly earnings tasted phenomenal
Who ordered the extra meat? Shareholders of Potbelly (NASDAQ:PBPB) did. In its very first quarterly earnings report since going public last month (the report was released after the market closed on Tuesday), half-decent lunch chain Potbelly jumped nearly 9.3% Wednesday, after revenues rose nearly 12% last quarter to $78 million, topping analysts expectations. We'll take a Chipotle carnitas burrito bowl or a Carnegie Deli hero any day over the meager Potbelly "sandwich" we tested last week, but you just can't argue with those numbers.
Despite our unsatisfaction with the company's portions, Potbelly is one of the newbie hot-shot darlings of the growing "fast-casual chain dining" sector (#Chop't, #DigInn) -- the stock is up more than 90% since its Oct. 4 IPO. Investors like how in just this short amount of time, nine new stores were opened, same-stores sales rose 2.5%, and the company still plans to add 40 more restaurants by the end of its fiscal year.
Fool contributors Jack Kramer and Nick Martell have no position in any stocks mentioned. The Motley Fool recommends Burberry Group and Chipotle Mexican Grill and owns shares of Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.