NEW YORK (CNN/Money) - All over, it seems, people are talking about how it's going to be a good Christmas for retailers.
Even now you can almost hear editors writing holiday-bedecked headlines like "Cash Register's Ring (Are You Listenin'?)" and "This Christmas, Malls See Green."
"The labor market is improving, optimism is improving and spirits will be higher this holiday season," said Northern Trust chief U.S. economist Paul Kasriel. "Sales are going to better than OK, they're going to be good."
But investors shouldn't get their, um, ho ho hopes up that these sales are going to translate directly into a pop for retail stocks. The thing about holiday sales is that they telegraph like a third-rate fighter. Everybody has known that things are going to be good this Christmas, particularly in comparison to last year, for some time now.
Retail stocks have been romping on that expectation. Since the beginning of last month the S&P Retail Index has hopped 11.8 percent higher. Many retailers are now trading at price-to-earnings ratios more than double where they were at the beginning of the year.
It may be hard for sales, even if they're really good, to live up to the sort of expectations of the stock market. In fact, there's something of a history of retail stocks performing well during bad holiday sales years and performing poorly during good holiday sales years.
The malls won't get decked this year, but investors in retail stocks, if they're not careful, might.
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