Wal-Mart Stores, Inc. (WMT), S&P 500 (.INX): This Was the Week’s Most Important Trend

Page 1 of 2

Although we don’t believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes — just in case they’re material to our investing thesis.

U.S. stocks fell again today, with the S&P 500 (INDEXSP:.INX) down 0.3%, while the narrower, price-weighted Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) lost 0.2%. August has not been kind to stocks so far, with the S&P 500 managing to post gains on just one-third of the trading days so far. Meanwhile, the Dow just closed out its worst week of the year.

Despite this, the VOLATILITY S&P 500 (INDEXCBOE:VIX) fell 2.4% today, gnawing back part of yesterday’s spike. (The VIX is calculated from S&P 500 (INDEXSP:.INX) option prices and reflects investor expectations for stock market volatility over the coming 30 days.)

Wal-Mart Stores, Inc. (NYSE:WMT)This “confidence game” looks overplayed
Earlier this week, I highlighted the latest results of the BofA Merrill Lynch Fund Manager Survey, which suggest that money managers’ animal spirits have surged over the past month. To cite just one figure: A net 72% of respondents said they now expect the global economy to pick up over the next 12 months — the highest reading the monthly survey has recorded in nearly four years, and a stunning 20 percentage point increase from July.

However, while the professional investor class may feel increasingly positive, sentiment among U.S. consumers appears to be headed in the opposite direction, if this week’s results from leading retailers are anything to go by:

  • On Wednesday, Macy’s, Inc. (NYSE:M) reported results for the quarter ended Aug. 3, missing expectations on earnings per share and revenues. Management reduced earnings guidance for its full fiscal year.
  • Yesterday, Wal-Mart Stores, Inc. (NYSE:WMT) missed expectations with regard to its second quarter earnings per share and revenues. The company lowered earnings guidance for its fiscal year ending in January 2014.
  • Kohl’s Corporation (NYSE:KSS), also reporting on Thursday, actually managing to meet Wall Street’s expectations for earnings per share; however, the company gave a forecast range for third-quarter earnings that was below the analysts’ consensus estimate.
  • Finally, upscale retailer Nordstrom, Inc. (NYSE:JWN) reported on Thursday afternoon, and while it beat its consensus earnings estimate for second quarter… drumroll… the company brought down its full-year guidance earnings per share.

Talk about a horrible run for retail! Unfortunately, the sobering outlook these companies advanced is consistent with the decline in the Thomson Reuters/ University of Michigan consumer sentiment index this month to a four-month low (although, to be clear, July’s reading was at a six-year high, so we’re not talking about a collapse).

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!