|Wall Street concerned over retail stocks|
As customers start to tighten their belts in preparation for the key holiday shopping season, Wall Street is beginning to worry that retailers will not be able to recover from a year-long stock market fall. Bloomberg notes that some traders are clearly betting against the sector or hedging their exposure to even deeper losses. This cautious approach, it says, is understandable. Target tumbled after announcing that sales trends softened in October, calling out weakness in key gift areas like toys. The National Retail Federation also predicted that holiday sales would grow at a significantly slower pace than last year. Meanwhile, Amazon projected the slowest holiday-quarter growth in its history, sending its market value briefly below $1trn. Mark Stoeckle, CEO of Adams Funds, commented: "The consumer is going to be looking for deals, and that will end up likely pressuring margins. So if you believe that, why would you own these stocks right now?” During the third quarter, the firm’s Adams Diversified Equity Fund, offloaded stakes in Target and Walmart in favor of more defensive consumer stocks, like beverage companies and Tractor Supply Co., which sells animal feed and farm equipment.