Tax Refunds Send False Recovery Signal

Tax Refunds Send False Recovery Signal

A taxpayer gets a refund check under the new stimulus program and then spends most of the money. That trend may help retail sales for the current quarter, but it will not help companies like Gap (GPS) and Dillard's (DDS) over the longer term.

The bump-up in retail sales may also mislead investors into thinking that it is safe to wade back into retail shares which have been depressed since the last holiday season.

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