S&P500 vs. Retail (Discretionary Spending vs. Economy Growth)
In past market recoveries and or market growth we see a confirmation that the economy is growing as well by looking at how retail companies perform. For example J C Penny performed extremely well before the Dot-Com bust and was also able to recover very well before going into the Housing Bubble.
Post the housing bubble, the economy has been inflated due to FED manipulation.
Job growth and wage growth cannot be growing at the level the government reports simply due to the lack of discretionary spending by the mass population. If we truly were getting back on track with the number of people employeed and were also on track with wage growth then a stock like JCP should be growing...not shrinking.
Also...very surprisingly, a sudden loss in profits from JCP preceded the market burst on BOTH occasions.
Granted we cannot use the same logic to a market where JCP stock doesn't rise (to compare to S&P pending fall), we should still keep this in consideration for the next time retail sales SUDDENLY slow.
Post the housing bubble, the economy has been inflated due to FED manipulation.
Job growth and wage growth cannot be growing at the level the government reports simply due to the lack of discretionary spending by the mass population. If we truly were getting back on track with the number of people employeed and were also on track with wage growth then a stock like JCP should be growing...not shrinking.
Also...very surprisingly, a sudden loss in profits from JCP preceded the market burst on BOTH occasions.
Granted we cannot use the same logic to a market where JCP stock doesn't rise (to compare to S&P pending fall), we should still keep this in consideration for the next time retail sales SUDDENLY slow.
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