Stocks Suggest We're Still In a Pawn Shop and Dollar Store Economy

June 14, 2012 10:25 AM EDT
While the market is higher today, looking at some of the stocks making 52-week highs doesn't give one a fuzzy feeling inside. More like a sickening feeling.

For example, look at the dollar stores. Every one is at a new 52-week high today: Family Dollar Stores Inc. (NYSE: FDO), Dollar General Corporation (NYSE: DG), Dollar Tree, Inc. (NYSE: DLTR).

Look at the furniture rentals companies. Aaron's, Inc. (NYSE: AAN) is near fresh highs.

How about Wal-Mart (NYSE: WMT). Yeah, you guessed it - 52 week highs.

The list goes on: Costco Wholesale (Nasdaq: COST), Ross Stores Inc. (Nasdaq: ROST), Target Corp. (NYSE: TGT).

What do all these stocks have in common? In a barbell economy, meaning the bottom-end and top-end is performing well and the middle is getting killed, these companies are at or near the bottom-end of the barbell.

What about the top-end? Tiffany & Co. (NYSE: TIF) - 52-week low. Coach, Inc. (NYSE: COH) - well off highs. LVMH Moet Hennessy Louis Vuitton (OTC: LVMUY) - - well off highs. Ralph Lauren Corporation (NYSE: RL) - well off highs.

So while headlines suggest that the economy is improving, these stocks are saying something different.

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