Bottoming is best thought of as a process rather than a moment. The all look different but when you see a correction it usually hits these stages:

• A negative catalyst appears, usually when stocks are expensive. Expensive stocks get sold. Investors "rotate" with growing speed.
• The threat seems larger. Inevitable. The rush to the exit picks up pace in stocks. Everyone's running the same playbook and "sell" is the only defensible call as every group sells-off.
• The tide turns, slowly then all-at-once. The risk becomes quantifiable. Bad news becomes more company specific. Selling slowly dries up as (dirty truth of investing here): The Optimists Always Win.

That was the case to a much greater degree the greatest bottom in the history of consumer discretionary stocks in March of 2020. The group was down 35% in just over a month. Stores were shutting down day after day, leading to pretty much the entire economy being shutdown for the foreseeable future. 

It was a really hard time to start buying consumer discretionary stocks. Like a Trade...

Below is my weekly video for members of Macke's Retail Roundup. 

This week, I'm hunting for bottoms. There are 5 stocks that have my attention. I'm under no qualms about the fact that we could be in for more downside, but I'm officially in "tactical buy" mode. Any time you get a washout like we've gotten, you have to be willing to put money to work in strongly-held convictions. 

I've got a few on my list, and I discussed them in my weekly video.

Watch the video below.

Ending a correction is a process. Hoping for a capitulation Crash is natural but a bit of a sucker's game and sort of misses the point. Getting into a crash is the same process only bigger. It's like ranking tornados; some or big, some less so but the sequence is always the same.

A Unquantifiably large negative confluence of negative catalysts starts to form. Uncertainty is bad but most people buy the dip. But then the news gets worse. And relentless. The selling builds steam as consumers and businesses start missing/ guiding lower. Indices fall (>10% or it doesn't count) but the damage is way, way worse under the surface. There is no place to hide.

[Emotionally the short version is 1. "Buying the dip, thanks for the free money, Market". 2. "I'm still up huge and can ride this out" 3. "I should have taken some profits" 4. "It's that idiot's fault I'm losing money and I hate Bankers/ Traders / Shorts and this is all a scam" 5. "Capitalism has failed. I'm selling and living in an RV"]

Then we bottom.

We've checked a lot of the required boxes for a bottom to at least get started at this point. The market is still wobbly but the brutal, indiscriminate...

Busy morning of earnings with a little something for everyone as we try to figure out who, if anyone, is actually experiencing a recession as opposed to just talking about it all the time.

This morning saw a decent report from the dominant player in the dismal wedding-focused jewelry space in Signet, deep-discount treasure hunt chain Ollies and the magnificent Williams-Sonoma, stuck in the middle of a rare sell-off.

Let's grade them!

Report Card Rules:

All grades are subjective and relative to each company's reputation, messaging and likely appeal to Wall Street.

I don't much care about Q4. Does anything seem longer ago right now than last Christmas? Q1 reports in retail are all about setting expectations for the next year, establishing clear deliverables and highlighting any tailwinds or concerns.

TLDR: These stocks are all way off fairly recent highs. Anything better than whining about troubling economic headwinds and guiding to something hugely negative is a Beat at this point.

Let's start in the Mall!

Signet: B+

Signet slightly beat the guidance issued in January but missed the original Q4 guidance...

What if there isn't a recession? 

Retail sales came in soft for February, with some strength in staples. Discretionary was so/so which would have seemed bad two months ago but comes as a bit of a relief in light of the bloodletting we've seen in stocks levered to the consumer over the last month.

Shares of Walmart are down 17% in the month since the company took down guidance for the year based on Tariffs and the general ennui of consumers in the face of "economic uncertainty". Walmart wasn't a cheap stock at $105 but at $80 shares are pricing in a weak St Patrick's Day, a soft Easter and about a 70% chance of a lousy Christmas.

Being the low-price provider of discount grocery and household items isn't a bad thing in a weak economy. Walmart is the world's largest employer (except the Chinese Army). COVID and the resulting supply chain disasters made Walmart a much better operator. For Walmart to keep breaking lower from here it's going to take more than flexing and sentiment. It'll certainly take more than a .3% change in retail sales for February and some weak Consumer Sentiment surveys.

What happens if the sky doesn't fall? What if the...

Below is my weekly video for members of Macke's Retail Roundup. 

It's been a helluva week. Even with Friday's bounce, XLY is still by far the worst-performing sector this year. 

Crashes are easy. I’ll tell you what to do if stocks fall 20% in one day: Buy something. 

Bear markets are a different vibe. If a crash is a blitzkrieg, bear markets are a seige. Every day like the last. Long, negative, intermittent spells of misery. Since December 17th the Consumer Discretionary SPDR is down 18%. No day much stands out as particularly miserable. So far, 2025 has been about two weeks of hope, followed by stocks falling 4 out of 5 days, usually about 1%.

The XLY has now given back all of its gains since last October and is breaking down much worse than that below the surface. First they came for the darlings like Elf and Abercrombie and no one said anything because those were momentum plays.

But the market isn’t just coming for losers on the day they disappoint. Stocks like ANF sell off seemingly every day. It’s been folded in half since January. The stock is “cheap” and...

The Animal Spirits have turned savage on Wall Street as stocks post their worst day in years. Time to take personal inventory and make a shopping list.

I started running money in 1997, straight out of graduate school. Underfunded and overconfident but with the magnificent good fortune to be working in San Francisco during the original Internet Bubble. It's been a journey. A deeply weird and eventful journey.

My career was almost killed in the crib by LTCM and ripple effects from the Thai Baht, a currency I haven't bothered to think about before or since. I survived the Dot.com bubble and crash, the GFC and a downgrade of US debt. Five years ago this week then-President Donald Trump declared COVID-19 a national emergency. Six days later California became the first state to issue Stay-at-Home orders and the country was on its way to shutting down almost-but-not-quite everything for 18 months. 

Let me tell you something, "What happens if every public space closes?" was a hard Headwind to price into your spreadsheet. February and March were tough for Consumer Discretionary and pretty much everything else:

There's a certain smell and vibe to...

Abercrombie took the pipe, Foot Locker was predictably lousy. Where I'm looking now as we grind through Mall Store Earnings,

Some of the best trades I make are the ones I pass on entirely. So it was for $ANF which into earnings this morning already down 40% for the year and somehow managed to disappoint investors. The teen darling and recent 10-bagger reported numbers slightly ahead of expectations for Christmas but guided the current year well below expectations. 

Needless to say Wall Street focused on the negative, sending ANF shares all the way down to the low $80s or 50% below where they were trading as recently as January.

I love ANF. I shop there with my son, it's made me a lot of money and the aggressively suggestive catalogs from the '90s were an endless source of delight when I was a younger man. Here's a little secret: consumer stocks are where love goes to die. If you hold your winners forever you usually end up broke. Love the game, date the stocks. Long-term ANF investors should have known better.

Which doesn't mean you need to forget about the companies entirely. Quite the opposite. Shares of the Gap have been public...

Every stock in the mall is getting obliterated on Tariff headlines and slow spending. Finding dips to buy and places to hide. 

We wanted clues as to how consumer stocks were going to handle the News when reporting earnings over the next couple weeks and, for the most part, the answer seemed to be "poorly", at least when it came to the Big Box names which continue to be plagued by Tariff headlines and ambivalent customers.

As more or less anticipated, Target and Best Buy posted ok numbers and guided cautiously (see: "Beat and Guide Lower" from earlier this week). On which is the only name of the three I own turned in a glorious quarter and outlook (sees ~35% Q1 growth!) but was only rewarded with a rather anemic bounce:

What Did We Learn:

• The risk is still to the downside. ONON could have bounced higher. In fact, it really should have gotten a bigger bump from today's report, which was about perfect. Best Buy arguably could have seen a gain on slightly better than expected news and Target hasn't seemed this lost in years but not in a surprisingly way. The net result was negative returns on the...

It's Game Time. By Tuesday morning's opening bell earnings from Target, Best Buy and ON will have set the stage for the coming flood of retail earnings... if you know what to look for. How to get ahead of the wave. 

It's time to get serious about retail earnings. Walmart has doubled the performance of the Magnificent 7 over the last 12 months. Right here in this very space I suggested buying the dip when the stock sold-off on weak guidance. And Investors who did chalked up gains of about 3%.

I love the consumer, Walmart the stock and making money but not even I can get super fired up over grinding out 3% trades on the largest employer on earth that isn't the Chinese Army. The entire planet follows Walmart and Amazon. If you don't own the stocks you should. And, once you buy it's best to forget about them entirely. 

If you want to make money trading consumer stocks you need to get into the grit and draw conclusions where the rest of the world doesn't. It requires knowing not just the financials but the stories behind some of the three-legged dogs, fallen angels and more obscure companies just popping up on Wall Street radars. ...

Wall St and Retailers adjusting to a random news flow world...

Remember the beginning of January? Retailers were pre-announcing strong Holiday sales and margins. Consumer Discretionary stocks were on a heater dating all the way back to pessimism lows last August. For every Kohl's or Target falling behind there were two or three Walmart's, Costcos, Victoria's Secret or Amazons; quality names near all-time highs based on nothing but old-fashioned execution.

It all seemed so rational. So fair. "Good news is being rewarded, everyone else is Target" we thought, "Surely nothing can stop us now"

Annnnnd that was the top. At least for now. As we wage into the Meat of retail earnings season next week a theme as emerged and it's sort of thorny. Companies are reporting strong results and guiding 2025 below estimates. Generally nothing disastrous. But words like "value conscious" and "promotional" are being used. 

We could let it slide a bit when Amazon said it. Amazon has a lot of spending to do. Same for Walmart. But we're only a couple weeks into these reports and we've heard variants on Beat and Guide Lower from, off the top of my head:

• Walmart...

Home Depot is getting the headlines but there are better trades below the surface

Home Depot is who I wrote about them being last night; a great American company more or less chained at the neck to the US housing market. This morning HD shares are higher by a couple percent after the company reported positive comps for the first time in 2 years and slightly better than expected guidance. 

Listening to the call as I type. The company is taking share, where possible and continues to invest in the business. HD can make you money if you get long during periods of housing recovery but, well, we're not there yet. 

Senior Exec VP Ann-Marie Campbell and CEO Ted Decker on the HD Analyst call just now: 

• "We continue to see softer engagement in larger discretionary projects"
• "The higher interest rate environment continues to pressure larger remodeling projects"
• "Our customer is very healthy... as they stay in their houses longer they will take on larger remodeling projects as opposed to moving [but not yet]"

So, HD...