Wal-Mart (NYSE: WMT) announced stronger-than-expected earnings and hinted that the upcoming holiday shopping season will be strong. This is just another sign that the US economy is strong enough to withstand the subprime mess, rising commodity prices, and the general negativity portrayed by the mainstream media.
Haven't we been warned that consumer spending is going to tank, because of the effect of the subprime meltdown, and rising fuel prices will keep shoppers at home. Well Wal-Mart, which derives so much revenue from the very shoppers that are supposed to be staying at home due to rising fuel prices, said that they expect consumer spending to be higher than expected.
As I posted yesterday, the economy grew 3.9% last quarter and job creation continues to be strong. Imagine what the US economy is going to look like in another 6 months when the subprime shakeout will have little effect on economic growth. All the naysayers who think the economy is heading into a recession, aren't looking at the big picture. Growth is fine and will pick up in '08.
As soon as investors regain some perspective, and finish their tax-loss selling (which is a big contributor to the recent sell-off), I would expect a very strong stock market rebound, to last well into Q1 '08.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC and Senior Editor of IsraelNewsletter.com. He holds no position in any stock mentioned as of 11/13/07.











Reader Comments (Page 1 of 1)
11-13-2007 @ 11:25AM
Jon Boy said...
How can you not shop there? Everything is so cheap... Although I hate shopping there... Google and Walmart will be the only big companies 50 years from now...
Bored? Check out my blog http://curiousread.com
Jon Boy
11-13-2007 @ 11:59AM
Jane Goodie said...
Wal-Mart seems to be a good deal not just for consumers, but it is also one for investors as well. The NewsVisual article on the company http://www.newsvisual.com/newsvisual/2007/11/walmart.html shows that the company’s board of directors have numerous corporate ties that can help it in future business deals.
11-13-2007 @ 1:03PM
Brockage said...
Thanking the retail gods here that Walmerica has posted a great earnings report. Lovin' that Live Better, Save Money gang. Go associates!!!! GoGoGo!