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Initial Jobless Claims and Walmart

Walmart reported earnings this morning and the numbers indicate that shoppers are spending less each time they visit Walmart.

The world’s largest retailer, Wal-Mart Stores Inc., is reporting a 3.2 percent increase in profit for the third quarter, helped by cost-control measures.

But the retailer said an important sales measure fell as it navigates through a tough economy and shoppers spend less when they go the store. Sales at stores opened at least a year, a crucial indicator, fell 0.4 percent.

Source: New York Times


While this sounds like bad data, I actually think this is good news for the market. Why? Because this is the kind of data the market needs to keep the Government Bubble and the carry trade in place. While really bad news such as a big LIBOR spike or inflation would tank the market, nuggets of weakness such as this Walmart data will help ensure that 0% interest rates stay in place and that the Government Bubble stays in place.  We have to keep our eye on the ball here.

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The overnight range is 1089-1098 and the weak Walmart number has sent the ES down about 5. Initial jobless claims are coming at 8:30 ET and Crude Oil Inventories will be reported at 11:00 ET.

Other items of interest this morning in the pre-market.

Watch the all time high club: This includes AAPL, BIDU, IBM, and BLK. In particular, I want to see if AAPL can take out its all-time high.

UNG: Natural gas is weak again this morning and it is a foregone conclusion that UNG will test its September lows. RSI is already below 30 so it looks like it could be a good bounce play. I think this bounce is too obvious and too widely followed and I wouldn’t be surprised to see this move closer to $8.25-$8.5 rather than stopping at $9.

There was no data yesterday on $USDUPX, so I’m back using UUP.

uup_003

I’m still waiting for the drop to $22 and a final jolt higher in the market in the immediate term.

§1211 · November 12, 2009 · WMT · · [Print]
  • Hi, haven't posted in awhile. Mostly sitting on sidelines watching the show. I have closed longs over the weeks in $AAPL & $GS. Still long $EWA $EWZ $CRM, but might get stopped out soon, lol. Here's my take on the market: The USD is already being defended, so I don't see a continuing downward spiral for USD, at least for now. USA (Fed's Bernanke & Treasury's Geithner) don't have to "do" anything. Russia, Thailand, South Korea, Phillipines, probably others are protecting their interests by supporting USD (WSJ reported this 11-12-09). It appears to me USD decline will be slowed or stopped, and assuming equities don't decouple from USD, the equities bull market will slow down and perhaps stop, for the short term at least, imho. My best guess is equities will trade sideways for some time to come, I think the big equities run up is over for awhile. Regardless, I'm mostly out of the market. Good luck to all :)
  • Osprey, glad you are back. I agree with your analysis.
  • What do you think about UUP at 22.62 right now in pre-mkt? Also, you're pretty solid on it forming base around 22, then?
    I feel that we might bottom around 22, simply as a contrarian to all the noise on the Dollar dropping further.
  • Well, I think there will be a consolidation at $22 and perhaps even a bounce that causes the market to pullback. However, long term the dollar has been in decline for a while so I think the odds are that it eventually plows through that support level.

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