U.S. markets were volatile once again today, as the ongoing selloff in oil continued unabated, and markets in China tumbled another 5% overnight.
Crude oil slipped more than 5%, and fell under $31 intraday, touching a low not seen since 2004. There is a direct correlation between the continuing devaluation of the Chinese yuan and falling crude oil prices.
Intraday, the Russell 2000 was in bear market territory, having dropped over 20% below its 52 week intraday high. Yet despite all of this, stocks did bounce back in the last hour to finish slightly higher. As oversold as the market is right now, that was not totally unexpected.
The Dow Jones Industrial Average finished 0.3% higher, while the S&P 500 was up 0.1%. The Nasdaq was lower by 0.1%. Sectors were mostly higher, with cyclical goods strong. But some materials stocks like Freeport-McMoRan Inc (NYSE:FCX) were absolutely crushed.
It wasn’t easy to find strong stocks today, but retailers like Kohl’s Corporation (NYSE:KSS), Macy’s, Inc. (NYSE:M) and Hanesbrands Inc. (NYSE:HBI) were looking far better than in recent weeks and thus are three of today’s best stocks. Here’s the way it went down:
Kohl’s (KSS)
KSS stock enjoyed a good ride today amid talk on the street that the retailer is considering options about its future, including the possibility of being sold to a private equity firm.
The Wall Street Journal is reporting that Kohl’s may be ready to employ an investment bank to consider various alternatives. Kohl’s board of directors meets this week and will be hashing out what it wants to do.
KSS stock peaked in April, 2015 at $79.60 a share, and has since fallen to a recent low near $41.86. Despite a recent bounce, KSS is still trading below its 200-day moving average. KSS stock was up close to 5% today.
Macy’s, Inc. (M)
Macy’s stock was rising almost 8% today after the NY based department store was told by Hedge fund Starboard Value LP that they need to tap into greater value from their real estate assets. Starboard said this could be done by Macy’s forming joint ventures for its premier locations in New York and other cities.
Starboard says that Macy’s real estate is worth in the neighborhood of $21 billion, and that they could create another $10 billion simply by separating it.
M stock has been a disaster in the past seven months, as shares which were $70 in July have since been cut in half.
Hanesbrands Inc. (HBI)
HBI stock was a 5% winner today after analysts at Nomura upgraded the Winston-Salem, NC-based maker of undergarments and other apparel from “neutral” to “buy,” and increased HBI stock’s price target from $30 to $35.
Nomura likes the three acquisitions that Hanesbrands has made over the past three years, citing the growth prospects that each of these purchases has given the company.
HBI stock has performed magnificently going all the way back to the end of 2013, when it was a $17 stock. It ran into recent resistance at $34 a share, but after pulling back to $26 a share, has the look of a stock that wants to go higher.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
