Retail Sales Slump

wal mart salesAlthough markets were still able to end today in the green, having the Dow close up 36 points, there was some discouraging data that hit Wall Street. After an encouraging, positive 0.8% increase in retail sales for June, July posted a drop of .1%. Analysts were expecting the number to at least match last month's number if not be better. This number proves to be even more disappointing, when you take into consideration the "cash for clunkers" stimulus program. Excluding autos in the number, retail sales actually fell -.6%.

These numbers are a wake up call for investors that even though there has been much success in the markets, consumers are still suffering. We cannot expect to get this economy back on track without the consumer. The news was slightly dulled by a strong earnings report from Wal-Mart. This is no surprise, as Wal-Mart tags themselves with the slogan, "the low price leader."

Other discouraging data that reached Wall Street today was the significantly greater initial claims number that came in. It would be no surprise to me if we were to see a severe drop in GDP towards the end of this year and early next year. Taxes are increasing, gas prices are more expensive, and more jobs are being loss. Even Tiny Tim warned of the plans to begin new regulations with the banks.

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We saw extremely low volumes of trading today. The fundamental signs continue to point to a very problematic, decaying economy, one of which that is walking on ice. Sure, sentiment seems to be better, mostly due to the performance of the stock market, but take that away and there is not much to brag about. I worry if this market goes any higher, the weak foundation will cause it to crash even quicker. In tomorrow's premium podcast (subscribe here), I will discuss some other fundamental changes that are causing a quick decay to the economy. Happy Trading.


  1. Anonymous Says:

    what happened to the multiple day small posting and/or weekend post?? hell you dont even post on fridays anymore...

    not trying to be greedy but im just saying if everyone else is like me theyre going to stop frequenting the site if you dont post :(

  2. Anonymous Says:

    The market closed down 76, not up 36... where did you get that?

  3. Anonymous Says:

    FYI the market did close up 36 points on Thursday. And that was what FF meant.


    Retail will continue to have it ruff.