Tuesday, October 21, 2008

Walmart Bureau for Economic Research

Here's some tasty data from Walmart's US CEO delivered today in a speech in California. When you're looking for real-time data points on the health of the US consumer, I'd trust Walmart's data over the Feds every day (I had the pleasure of reviewing some of Walmart's data mining tools back in the late-90's. It was truly the holy grail of real-time retail information).

Wal-Mart Stores Inc's U.S. customers, increasingly worried about their own financial security, are waiting until they get their paychecks to buy even the most basic necessities, the retailer's U.S. division head said on Tuesday.

Key points:

* Wal-Mart for the first time is seeing a paycheck-related spike in sales of baby formula, suggesting consumers are rushing to buy such necessities as soon as they have the cash.

* the percentage of sales from the days surrounding pay periods has risen 250 basis points.

* Credit used as a form of payment at Wal-Mart is falling and that the decline is expected to reach into the double digits this year.

* Many consumers have "maxed out. Credit card limits don't allow them to use credit."

All is well....Pay no attention to the man behind the curtain....


What should we make of the Apple numbers?

Apple beat their expectations for the quarter on continued strength of the iPhone. The stock fell $6 during the day and is now back up $12 afterhours (afterhours trading is whacky, I'll reserve judgement until tomorrow's close).

Apple has benefited from the weak US dollar for much of the last 2 years. That period appears to be over for the near-term, so they will be increasingly reliant on the US consumer. I think that is reflected in their forward guidance that was far below original estimates of various analysts. It should be a pretty good tug of war on this stock tomorrow.


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