Has Wal-Mart climbed over the wall, yet?

Happy Friday everyone!

You may have seen that the financial markets snapped a 6 day winning streak. The cause, of course, was that massive bellwether or consumer spending, Wal-Mart (ticker: WMT). While WMT does not normally provide quarterly earnings guidance (thankfully) the Company said in a pre-recorded message that it expected its fourth quarter earnings to be between $1.08 and $1.12 per share. Meanwhile, analysts had been expected earnings at the high end of that range. Furthermore, CEO, Eduardo Castro-Wright said “We recognize that some customers may be more cautious in their holiday spending.” This was enough to spook the markets and a near 100 point sell off in the DJIA ensued.

As the world’s largest retailer, Wal-Mart’s voice is more important than all of the other voices. This especially true because they are the discount retailer in the midst of a shaky economy. So for Wal-Mart, and its “Everyday Low Prices,” to project earnings lower than were previously expected means that your average consumer is scaling back Holiday purchases. This again is powerful evidence that what really weighs on the American psyche right now is the high unemployment rate. It also means that the U.S. economy has a long way to go until it is on FIRM foundations again.

Jason