Wal-Mart: Weak Sales, Despite Stimulus and 'Slumming It' Effect

U.S. July Retail Sales Slow, Threatening Back-to-School Season: “U.S. retailers' sales in July rose at the slowest pace in four months as higher fuel and food costs discouraged consumers from visiting malls. Wal-Mart Stores Inc. said August sales won't grow as quickly as last month.”

Uh oh. As the economy deteriorates, the theory was that Wal-Mart would come out on top as middle class folks are forced into moving down the retail food chain. The theory was that the middle class would have to go ‘slumming it for a while’.

Don’t forget, those ridiculous stimulus checks are part of these numbers. So you have stimulus checks and the ‘slumming it effect’ STILL resulting in weak sales for July. This just can’t be good.

I have privately heard from retail analysts and those in the ‘export development’ arena of finance that they have started to see signs that several larger retailers are set to bite the dust in both Canada and the U.S.

Wal-Mart (WMT) looks to have failed to break out above resistance at $60.00. Poor earnings were the catalyst that put prices back “into the box”. WMT could be "dead money" and consolidate between $56 and $60 for any length of time. Failure to hold $56 and then again $55 would result in a fairly quick drop to the $50 area. This would signal a weak consumer economy indeed...