It’s no secret that over the past several months commodity prices have been soaring and the economic uncertainty has retailers cautious about the second half of the year. Tracking recent earnings results in the consumer staple and discretionary sectors, we’ve probed even deeper to examine retailers Q2 and Back-To-School performance. This Product Insight also examines how retailers will do in the upcoming quarters.

Analyst ratings can be an important tool when making investment decisions. From October 9, 2007 through March 9, 2009, analyst Buy ratings fell by 63% as a proportion of total recommendations, while Sell ratings exploded 384%. Even at the midpoint of this period (May 15, 2008), the equity market (as measured by the DJIA) was roughly 50% higher than the bottom (12,992 vs. 6,547). However, Buys were down 43% and Sells were up 347%. For three months within this period, a disconnect between ratings trends, the DJIA, and XLF emerged. While Buy ratings dropped and Sell ratings increased, the overall market (as represented by DJIA and XLF) rose.