{"id":439,"date":"2010-06-11T10:46:00","date_gmt":"2010-06-11T14:46:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=439"},"modified":"2018-08-18T17:49:23","modified_gmt":"2018-08-18T21:49:23","slug":"not-surprisingly-may-retail-sales-fall","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/06\/11\/not-surprisingly-may-retail-sales-fall\/","title":{"rendered":"Not surprisingly, May retail sales fall"},"content":{"rendered":"

Last month retail sales fell 1.2% according to the U.S. Commerce Department.\u00a0 This compares to an expected increase of 0.2%.<\/span><\/p>\n

Analysis:<\/strong> While the press is questioning the strength of the economic recovery because of the fall in retail sales, I am not.\u00a0 The month of May saw the worst stock market performance since 1940.\u00a0 Rightly, or wrongly, your average fellow citizen sees the performance of the financial markets, especially the Dow Jones Industrial Averages, as a harbinger of economic performance.\u00a0 What’s more, they do<\/strong> adjust their spending based on the stock market performance.<\/span><\/p>\n

Unfortunately, the generations that most actively invest still have as a part of their collective consciousness and unconsciousness the idea that the Great Depression of 1929 happened because of a stock market crash.\u00a0 While patently untrue, this supposed causal connection still exists.<\/span><\/p>\n

Another factor linking the stock market with consumer mood, and thus their spending, is that a large percentage of consumers have investments in the stock market.\u00a0 Upon hearing that the stock market has declined they feel a loss of wealth, and thus of confidence.\u00a0 Spending therefore dries up.<\/span><\/p>\n

But did\u00a0the stock market\u00a0fall because of a big change in the U.S. economy?\u00a0 NO.\u00a0 The stock market primarily fell because of nervousness about those strangely un-cohesive<\/span> Europeans and their inability to convince investors that they were showing up to take care of their problems.\u00a0 So am I concerned by the drop in retail sales?\u00a0 Sort of.<\/span><\/p>\n

What we have here is a potential vicious circle.\u00a0 The stock market declines because for non-U.S. economic reasons, leading to consumer fear.\u00a0 The concurrent drop in retail sales leads to investor fear so they sell of their investments.\u00a0 Consumers notice the drop in the market and get even more fearful.\u00a0 And on and on.\u00a0 However, economic data are mostly solidly positive.\u00a0 That will change investor mood.\u00a0 And Europe is paying attention…thank God.\u00a0 That will change investor mood, too.<\/span><\/p>\n

Importance grade:<\/strong> 6; I don’t consider today’s data to be indicative of anything other than the continued link of stock market performance with the Great Depression in the collective consciousness of your average Jane and Joe.<\/span><\/p>\n

Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Last month retail sales fell 1.2% according to the U.S. Commerce Department.\u00a0 This compares to an expected increase of 0.2%. Analysis: While the press is questioning the strength of the economic recovery because of the fall in retail sales, I am not.\u00a0 The month of May saw the worst stock market performance since 1940.\u00a0 Rightly, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-439","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/439","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=439"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/439\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=439"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=439"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=439"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}