Southridge Capital took a look at the marketing sector, which we feel is pushing the market upwards. According to Norbert J. Ore, chair of the Institute for Supply Management? Manufacturing Business Survey Committee: ?The manufacturing sector grew for the eighth consecutive month during March.
The PMI has indicated that the rate of growth is the fastest since July 2004. Mr. Ore also stated that out of the 17 industries tracked; only Plastics & Rubber had a contraction last month.
Our inflation rate hasn't moved since these positive numbers have been recorded. Southridge Capital is optimistic since the economy is still undergoing positive growth.
Southridge Capital was also encouraged by recent reports that retailers posted strong gains for the 5 weeks ending April 3, 2010, with all major retail groups having seen their sales increase in the past 5 weeks.
Since consumers feel better about the economy, they spend more money. Hence, gains in these sectors. Over the past 24 months, companies waited for consumers to spend money, but some couldn't wait any longer. We all remember some of the big ones: Fortunoff, Circuit City, Chrysler, GM, Filene?s Basement, Eddie Bauer all filed Chapter 11 during this time frame. We feel consumers are finally turning the corner.
One example of a company that was able to hold its own during the recession and should do better as the economy turns is Mattel?s Barbie doll. U.S. Barbie dolls sales, increased for the fourth consecutive quarter, and in the fourth quarter of 2009.
Also on the global stage they have seen a 3% increase in sales. Mattel, Inc., (NASDAQ:MAT) has been researching whether there would be a demand for a computer engineer Barbie Doll. The Barbie has amassed over 125 different looks and is sitting at 52 week high. This is a good sign that consumers have the extra spendable cash to keep the Barbie Doll alive.
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