Myer's sales report was a notable feature of an otherwise unexciting market landscape today. They produced a solid 3.9% increase in like for like sales in the first quarter
Myer's stock price is up 4% today but the interesting thing about this as far as the wider economy is concerned is that it follows a stellar result by David Jones' earlier in the week. DJ's achieved 10.4% comparable sales growth in the first quarter.
Grinding improvement rather than sharp rebounds are the order of the day for economies in the post GFC environment. So it's important to note that both David Jones and Myer's results benefited from stock clearances and aggressive sales campaigns. Even allowing for this, these were both solid results that pleased the market. They also follow Westpac's upbeat Consumer Confidence survey which showed a pleasing 4.8% increase in the sub index tracking views on whether this is a good time to buy a major household item.
These department store results look like "green shoots" that may be worth keeping an eye on. The improving employment market might be about to drive some improvement in consumer spending. This would see consumption joining the pick up in business conditions surveys as positives for the economy. This is of course what the RBA has been anticipating and would not be before time given the strong downward pressure on the economy still being exerted by falling mining investment and lower commodity prices.
As this chart from our stock broking Pro Platform shows, Myer has peaked neatly at the 38.2% retracement level so far today but it's done so on a strong volumeMYR.ASX Daily
Source: CMC Markets Pro Platform
Aussie Dollar Chart
The Aussie Dollar's break above channel resistance and the head and shoulder neck line yesterday was mainly about $US weakness. However, the prospect of a better Xmas shopping season might further move out expectations for any RBA rate cut and will be a supportive influence for the Aussie Dollar.
The Aussie has just hit the first of a couple of Fibonacci levels. If it fails here, potential buyers might get a pull back to buy at lower levels. In those circumstances for example a retest of the old trend line resistance might be possibleAUDUSD CFD Daily
Click to Enlarge