7.6% drop on WalMart today, off 10.04 for a gap of slightly under 10 points. Interestingly, this represents the second large down gap WMT has made since May. How long it will take to recover remains to be seen, but the point I’d like to bring up is that the bottom line of the news is that WMT is having to further discount prices because merchandise is not selling.
If people are not shopping at their rollback mega-stores that dot the land, what does that say about American consumer confidence and the financial reserves of the typical WMT shopper? They’re apparently not shopping at AMZN, as they gapped down 5% today or Target, down 3.1%, also a gap.
Food banks across America are facing surging demands according to CNN. Is that a further indicator that the recession is already lapping at our heels?
The CCI as reported today showed a drop in confidence of 2.7 points to 95.7. Still pretty high compared to a bit over 25% during the Great Recession, but by no means a positive economic number. Also, it’s the third consecutive drop in the CCI.
The silver lining?
If inflationary pressures > less shopping > price cuts and price cuts = lower corporate profits, then the resulting reaction is deflationary pressure on the market. Oil, gas, lumber and housing prices are all dropping.
If the Fed is less aggressive in tone tomorrow, they’ll be looking at data like this and the CCI drop today rather than signaling the next hike.
So, if the market reacts favorably to the FOMC news, then I expect WMT to have a bounce through Friday. If the market’s down, then the chart tea leaves I read suggest 117.75-ish as the next support.
Finally, those tea leaves I was just reading? Well, they were apparently laced with peyote, so no one should take any of my views with any seriousness. This is NFA. Oohhhh, the monitor is melting . . .
Leave a Reply