Wednesday, May 13, 2009

Retail Sales a Picture Worth a Thousand Words--UGH (Chart)

Retail sales dropped .4 percent for the month and are down 10.1 percent year over year. Retail sales account for two thirds of GDP. This report is bearish on the market.

There is a strong relationship between GDP and stocks. This report really puts pressure on relative valuations. The risk of owning stocks is mounting as we pointed out last week in our article --They called me crazy, S and P 900-1000 (Part Two)
  • A major retracement to the downside is likely, and is imminent.
  • The bottom line. The risks out weigh the rewards at this level.
The S and P was trading near 925 when we wrote that. Now down 4 percent.

We will update the S and P numbers shortly.

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Bob DeMarco is a citizen journalist and twenty year Wall Street veteran. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. Content from All American Investor has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites. Bob is actively seeking syndication and writing assignments.

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