North American Investment Daily; Upgrade & Downgrades

March SSS Review The Easter Bunny Hopped in Early with March Results Better than Expected Across the Board-March SSS were better than expected for the discounters, clubs, and department stores with all of our companies exceeding our estimates (SKS delivered the most upside surprise). Despite the negative impacts of unfavorable weather, rising gas prices, negative headlines abroad, and the Easter shift, consumers continued to shop. Mall traffic improved throughout the month into Week 4 (turning positive in Weeks 3 and 4), and then turned negative in Week 5 due to the Easter shift. Consumers also padded their wallets with higher tax refunds in March (+15.6% YOY). We believe inventories remain well-managed, which should bode well for 1Q11 EPS.

Global Emerging Markets Strategist EM Quarterly: Resilience

Bullish — We stay bullish and expect further solid gains in EM equities to end- 2011. Our year-end target for the MSCI GEMs index is 1,500, 25% above current levels. With EPS growth of 18% in 2011, this implies some multiple expansion to 12.9x forward earnings, 12% above the long-term average for the asset class of 11.5x.

Resilience — The strong rally in EM equities since late-February and a 1.7% gain in Q1 showed great resilience to the negative events so far this year – MENA unrest, sharply higher oil prices, and the Japanese earthquake


.