Retail stocks are on watch as signs of a disappointing holiday season emerge
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There could be early warnings sign on holiday sales in the retail sector with logistics managers telling CNBC that significant consumer pullback is showing up in ocean shipping.
The logistics managers report that they have seen a 20% drop in ocean freight orders for the months of September and October across many products - including machinery, housing, industrial and some apparel.
That developments coincides with some retailers already having to fire up promotional activity in order to clear excess inventory. Many retail chains had taken an aggressive stance earlier in the year by ordering inventory early and in bulk in anticipation of a strong second half for demand and to avoid the empty shelves issue of last year.
Are consumers pulling back? The National Retail Federation noted that while consumers have become cautious, they have not stopped spending.
"Growth is not as high as last year, but households continue to spend each month as more jobs, wage growth and savings backstop their finances and help them confront higher prices," updated Chief Economist Jack Kleinhenz.
Nike's (NKE) set off one of the biggest alarm bells in the sector on the inventory issue and has thrown a brighter spotlight on the trends all across retail including for chains as varied as Dick's Sporting Goods (DKS), Lowe's (LOW), Macy's (M), Target (TGT), Best Buy (BBY), and Dollar General (DG).
The SPDR S&P Retail ETF (NYSEARCA:XRT) is down 37% on a year-to-date basis to trail the performance of the broad market.
Earlier on Monday, Bank of America reeled in earnings expectations on e-commerce giants Amazon (AMZN) and eBay (EBAY) due to concerns over the strong U.S. dollar, markdown activity, and broad macro pressures.