Wal-Mart: Is the Top in Place?

Wal-Mart (WMT) missed its revenue expectations for the quarter of $114.9 billion when it reported revenues of $113.9 billion.  And, of course, the market did not like it. Stock is off 4%+.  WMT, also, lowered its EPS from $4.94 to a lower range of $4.88. 

My immediate assessment for WMT is another 10% correction in price to $61 from its current level of $68.  As the bear case takes hold, WMT looks like a $53 stock, or 23% from the current levels.  Eventually, over the next couple of years, WMT should take out its February 2009 low at $42, which is a decline of approximately 40% from its current price of $68.  And, it would not surprise me to see WMT trading below $35.  (See the following chart.)

Pentagon Spends $1.5 Million to Develop New Beef Jerky

Yes, our "Pentagon" spent $1,500,000 of your tax dollars to develop a special new roll-up beef jerky, which was funded by taking money out of a weapons program.  Now, I love my jerky but give me a break.  And, what does beef jerky have to do with national defense?  Answer: Absolutely nothing! The "Pentagon takes money out of a weapon's program to develop jerky that rolls-up.  Wait, this one is just a good as the jerky development, or should I say just as "sad."  The Office of Naval Research helped spawn "Caffeine Zone 2," which is an iPhone application that tells people how to schedule their coffee breaks. 

A "Bounce" in the DJIA?

Where in the United States Could You Live on Social Security?

 $1,130.33 is the average monthly Social Security Benefit that retirees receive from the government.  Assuming that you worked 40 hours per week that equates to a wage of $6.40/hour, which is less than the Federal minimum wage of $7.25.

www.GlobeLifeInsurance.com

Three Bearish Pieces are in Place for Further Market Weakness

Students Petition the Government to Refund Student Loans for Worthless Diplomas

Well, I knew this was coming to taxpayers across America.  That is, a petition to "provide university graduates the ability to trade their Diplomas back for 100% tuition refunds."  The petitions states as follows:

"Because of the inability of recent college graduates to find gainful employment in order to repay their college debt, and since this college debt cannot be eliminated in bankruptcy, and most of the recent additions to the job market have been in service related industries, the Obama administration should take up the cause of reducing college debt and hold those accountable responsible."

You may sign the petition by clicking on "We the People, Your Voice in Government."

Social-Economic Trends: Anarchy

Euro-zone youth unemployment overall has risen to 23.3%; with Greek youth unemployment at 58% and Spain at 54.2%.  Folks, this is a chart that portends to "anarchy" in Europe.  And, yes, it can and will happen in the United States.

In regard to the United States, the unemployment rate for workers under the age of 25, according to the Economic Policy Institute, is 16.4%! What about the unemployment rate for high school graduates in the United States?  Answer: 31.1%! What about unemployment rates for high school graduates by race/ethnicity?  Answer: Blacks (49.1%), Hispanics (33.8%), and Whites (25.6%). 

Once again, you have been forewarned!

Is the Top In for the S&P 500?

Re-Election of President Obama: Investment Perspective Going Forward

Today’s election was merely a choice of who was going to be the Captain of the Hindenburg or Titanic.  Both of which ended in complete disasters.  Now, let’s review my election forecast going back to June 2011, especially my comments made on September 13, 2012.

1.     On June 15, 2011 in my post entitled, “First Presidential Forecast,” I made the following comments: “In making any kind of forecast is definitely a risky business, but to forecast the 2012 Presidential election is insane.  However, I feel that I maybe on to something, insane or not.  Now, if the stock market is higher in 2012, President Obama is more than likely to win.  The strategy that I will be using is simply my S&P 500 EMA Strategy of the 15-week EMA to 40-week EMA.  If the 15-week EMA is above the 40-week EMA, Obama wins.  On the other hand, if the 15-EMA is less than the 40-week EMA, he loses.  Currently, President Obama wins, because the 15-week EMA > 40-week EMA.  However, the key is what will the EMA strategy be saying in 2012.  Stay tuned.”  Well, the 15-week EMA has stayed above the 40-week EMA.  Enough said.  President Obama is re-elected.

2.     On February 18, 2012 in my post entitled, “And, the 2012 Presidential Winner is … ,” I made the following comments: “Since my post of June 15, 2011, I came across an interesting study that reinforces my aforementioned hypothesis, entitled “Social Mood, Stock Market Performance and U.S. Presidential Elections: A Socionomic Perspective on Voting Results” by Robert Prechter, Deepak Goel, Wayne Parker, and Matthew Lampert, contends that citizens vote in accordance with trends in social mood, and that stock market indexes appear to be the best available indicator to measure social mood.  According to their study, voters really don’t care about jobs numbers, GDP growth, European debt crisis, and the decline in home prices.  Instead, they respond to fluctuations in the stock market.  That is, the value of their stock portfolios and 401K plans.  Therefore, if the Republicans want to capture the White House in November, they better hope that the S&P 500 crashes!”  Well, the stock market did not crash and President Obama was re-elected.

3.     On September 13, 2012 in my post entitled, “And, the Winner of the 2012 Presidential Election is?  President Obama,” I made the following comments: “President Obama is likely to win in his re-election bid based on the performance of the stock market over the past three years.  Therefore, the probability of President Obama being re-elected is high! So, how can one use the above information against the backdrop that the next four years will usher in the largest economic/financial disaster known to man with the DJIA selling for 1,000?  (Yes, the coming economic downturn will be greater than the Great Depression of the 1930s.)  Given the scenario, I don’t consider whomever occupies the White House will win any popular contests.  Remember that over the next four years the expected social mood of this country will change from positive to very “bleak.”  Therefore, the man that occupies the Presidency will undoubtedly be highly despised.  In other words, the proverbial bottom-line is to vote for the candidate you like the least.” 

 4.     On October 29, 2012 in my post entitled, “It’s Still Obama’s Election to Lose,” I made the following comments: “The Elliott Wave Theorist has done extensive research on those factors that influence re-election outcomes of presidential races. Its research revealed that the stock market is an “excellent indicator” of re-election outcomes.  In addition, GDP had a moderately positive relationship to re-election results; and inflation and unemployment rates had “no” significant predictive value.  It tested stock-market performance 1, 2, 3, and 4 years prior to elections and found all of them to be significant.  However, the 3-year time horizon leading up to the re-election was the most significant.  So, where do stand based on the 3-year time horizon?  Given the 3-year time frame, the DJIA has gained approximately 36%.  Even though the economy remains weak, GDP growth between 1% to 2%, the 3-year positive trend is how people feel, as measured by the performance of the DJIA, continues to give the edge to President Obama in his re-election bid.”

America, Is This the Kind of Regulation That You Want?

Buckingham Slate, a Virginia business that dates back to the Civil War, was recently fined by federal regulators with a $4,000 fine over a trash can “lid.”  Yes, that is correct.  According to the Mine Safety and Health Administration's official citation, “the offending can, or more correctly a waste receptacle in the words of the official citation, was not covered.  What's more, the receptacle was full.  It could be smelled. There were flies in and around the receptacle.  And, to crown all, management engaged in aggravated conduct constituting more than ordinary negligence by allowing this "condition to exist."  Therefore, my "tip-of-the-week," don't forget to put the lid on your trash can, because the Mine Safety and Health Administration has just been spotted in your neighborhood. 

Don't Forget!

171,000 (?) Jobs Added In October, Unemployment Rate 7.9%

On Wednesday, October 31, I made the following statement: "The current consensus for the NFP number is approximately +123,000.  However, given the revisions by ADP, my estimate is +85,000 (+/- 30,000)."  

The BLS reported this morning that 171,000 jobs were added in October with the unemployment rate rising to 7.9% from 7.8%.  So, my estimate of 85,000 was way off by 86,000 jobs.  Not so fast! Why?  Because that infamous Birth/Death adjustment came in at adding 90,000 statistical jobs, which by the way these phantom jobs have added 568,000 year to date to the total.  Therefore, if one subtracts off the phantom jobs of 90,000 form the so-called 171,000 jobs added, you arrive at 81,000 jobs added, which is darn close to my forecast of 85,000.

Republicans Have Won Every November 6th Presidential Election Since 1860

BreitBart reports that the date November 6th has always been a good one for Republicans:

1. 1860 - Abraham Lincoln over Stephen Douglas
2. 1888 - Benjamin Harrison over incumbent Grover Cleveland
3. 1900 - William McKinley over William Jennings Bryan
4. 1928 - Herbert Hoover over Al Smith
5. 1956 - Dwight Eisenhower over Adlai Stevenson
6. 1984 - Ronald Reagan over Walter Mondale.

Will the trend continue?  We will find out in less than one week!

Deflation or Inflation? Make the Call Based on the 10-Year TSY Note

ADP's Adjustment: "Cancels" 365,000 Private Jobs Created in 2012

If I had been paying ADP for this research report on private sector jobs throughout 2012, I would today be on the phone demanding a complete refund for my subscription fee.  Businesses pay good money for this type of research in which they base capital budgeting decisions on going forward.  Bottom line to these ADP's private sector job revisions is that if you thought America created jobs in 2012, it didn't. ADP made that happen through statistics.  I guess the old adage, caveat emptor, is still valid.

New ADP Count Slashes Job Creation for September 2012

"Revisions to the way payroll data firm ADP counts private sector job creation have resulted in a sharp drop in the September employment count.  ADP's new calculations put the monthly job creation at just 88,2000, which is down from the 162,000 the firm originally reported earlier this month."  Wow!  In other words, ADP's private sector job report has been drastically overstated since it stated providing the statistic.  ADP will report on October's private sector job creation tomorrow, which the market already doesn't like wants coming.  Then, on Friday, the Department of Labor will report on the non-farm payroll for October.  The current consensus for the NFP number is approximately +123,000.  However, given the revisions by ADP, my estimate is +85,000 (+/- 30,000).

Hopelessness: Eurozone Crisis

Unemployment in the Eurozone has risen to a new high at 11.6%, with Spain recording the highest jobless rate with more than one in four out of work.  And, it is only going to get worse over the next four years, inclusive of the United States of America.  Sandy was a national disaster in which my prayers and thoughts go out to everyone impacted.  However, the financial disaster coming to America and the Eurozone over the next four years will be the real "perfect storm."  I know, I know that none of this financial stuff matters to anyone until it matters to everyone; and therein lies the problem.

It's Still Obama's Election to Lose

From my post of September 13, 2012, I made the following comments: “The Elliott Wave Theorist has done extensive research on those factors that influence re-election outcomes of presidential races. Its research revealed that the stock market is an “excellent indicator” of re-election outcomes.  In addition, GDP had a moderately positive relationship to re-election results; and inflation and unemployment rates had “no” significant predictive value.  It tested stock-market performance 1, 2, 3, and 4 years prior to elections and found all of them to be significant.  However, the 3-year time horizon leading up to the re-election was the most significant."

 So, where do stand based on the 3-year time horizon?  Given the 3-year time frame, the DJIA has gained approximately 36%.  Even though the economy remains weak, GDP growth between 1% to 2%,  the 3-year positive trend is how people feel, as measured by the performance of the DJIA, continues to give the edge to President Obama in his re-election bid.

Bye, Bye, Miss American Jeep

Jeep, the rugged brand President Obama once said symbolized American freedom, is considering giving up on the United States and shifting production to China.  Such a move to China would crash the Toledo, Ohio economy where Jeeps are made and supplied.

In a Bloomberg interview, Jeep's president said the automaker plans to restore Jeep production in China, suspended in 2009, and is considering making all Jeeps in China. 

Well, it appears that the American taxpayer, who bailed-out Chrysler and Jeeep, is once again being fleeced.  And, then again, something things never change.

One Reason Why I am Still in the Deflationist Camp

Would anyone in their right mind purchase a 30-year TSY security to earn 2.93% if one believes in the current inflationary aphorism?  In other words, the above chart depicts one reason why I am still in the deflationist camp.  Since 2009, the Fed's balance sheet has increased reserves (liquidity) to the banking system by close to $3 trillion. if you take into account QE1, QE2, Operation Twist, and QE Eternity. In spite of this excessive injection of liquidity into the economy, long rates have plummeted, which is indicative of a deflationary environment.