主题：1/8/2009 Market View -- 宁子

Jobless claims fall for second week but no one is impressed.

Jobless claims were much lower two weeks back than expected (491K) and again this past week (467K versus 555K). Two weeks of lower numbers after week after week of ugly rises. The prior week decline was pretty roundly scoffed as seasonal adjustments skewed the numbers as fewer holiday jobs were created and thus the adjustments reduced the figure too much. This week, however, there were no adjustments, just fewer claims. If you put the two weeks together without any asterisks it would be interesting. As it is, most view it as premature, way premature, to get excited or even titillated.

One of the reasons is the continuing claims number. It hit a new high on this run at 4.61M. Have not seen that many since the early 1980's. Now today the work pool is much larger so 4.6M today, similar to the dollar, is not what it was in 1982. Nonetheless, 4.61M is a lot, and it continues to grow. Usually you see CC's decline as an employment slump deepens because those on the lists fall off as their benefits run out. This economic decline has occurred so quickly, however, that the rolls are still expanding as the newly unemployed draw a check.

The two improving weeks could possibly mean the rate of loss is slowing. That seasonal aberration makes that a hard concept to buy into at this point. It is interesting and worth keeping an eye on. When you consider how rapidly the decline occurred and how companies are slow to take action, however, it is hard to imagine improvement yet. Nonetheless, jobless claims are not hires, which don't improve until the economic and business cycle is robustly higher. They slow down long before any hiring starts. Thus the usual progression is the decline in new claims, lower continuing claims, and then well into the expansion, new hires. Again, worth watching how this unfolds over the next month to six weeks.

WMT sales decline: consumers completely hunkered down or a sign of a trend.

You know the drill: after WMT lost its growth status in the late 1990's and became just another slow growing large cap, it has only moved higher when economic times turn down and people become discount conscious. In short, WMT does not perform well unless there is a recession and people reluctantly head there to shop to stretch dollars.

This last WMT run started in December 2007, just after the stock market topped in anticipation of the economic slowdown. Prior to that it languished from early 2002 through late 2007 in a molasses-like flat to down range. It rallied in 2001 on into 2002 after 9-11 when the economy went into standstill. Consumers sought value in that recession and WMT rallied from 40ish to 63. Nice move. Before that as it traded in its post-growth stage, it traded lethargically. After that run and the economic recovery, it slipped into that long malaise as consumers shopped elsewhere during the better economic times, spending their money on better goods. Sure they still buy toilet paper, paper towels, cleaning products and even groceries from WMT, but is not the first choice for other items.

Thus you always take note when WMT sales growth slows as a potential indication that consumer habits are changing and the consumer is looking elsewhere to shop. Is that the case this time? There are some indications that other retailers are performing better than expected. TGT sales were not as atrocious as anticipated (-4.1% versus -9.1%), and Macys was better (-4% versus -5.9%). Interesting, but not signifying a change in the consumer just yet.

What happened over the holidays is that massive discounting lured shoppers to Macy's and other stores with higher quality merchandise. That took customers away from WMT and to those other stores, but due to the discounts their sales dropped even with the higher traffic. It was a desperate move to get rid of inventory at any cost and it did pull customers from WMT.

Thus there is no subtle shift away from discounters that would indicate a shift in their economic outlook. Yes confidence and sentiment rose in December, but they are hardly at levels that suggest consumers are switching to largesse once more. Consumers were looking for bargains, and the 50% to 75% off discounts were a magnet. This month that is going to slow down despite post-holiday sales and WMT's figures will recover.

Look for bargains.

Consumers are more in a savings mode at this point given the uncertain economic future. If you look, however, there are some great bargains out there. If you have some cash you can make the best buys since the last recession. In New York, California, and Florida many are selling some very nice merchandise that you would never see on the market. They are going at very good prices as well. There is a move to get rid of 'toys' such as boats, motorcycles, non-utilitarian autos, paintings/artwork, etc. If you have some extra coin and are diligent there are amazing deals on quality merchandise showing up on the web and other places as consumers look to turn stuff into cash.