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
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

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!