Weekend Reads: Retail Problems and How to Handle This Scary Stock Market
At first glance, it might look like the stock market has finally done pretty well for a week through May 19—-the benchmark S&P 500 SPX,
fell only 0.7%. But it is on track to be down for seven straight weeks – the first time since 2002, when it fell for eight straight weeks.
Additionally, the consumer discretionary sector, which includes most retailers, suffered a 7.6% hit. This includes a 29% drop for Target. Walmart fared a little better; its stock fell 19% for the week on its own earnings decline report. Both companies felt the pressure of bloated stocks.
Here’s more in-depth coverage of this week’s retail revenue reports, including changes in consumer spending habits, from Tonya Garcia:
Target stock plunges as earnings fall on changes in consumer spending and rising transportation costs
Walmart says consumers are opting for private label for products like dairy and bacon
Learn more about the tough side of retail:
A Brighter Side of Retail
The biggest home improvement retailers have done well this week, all things considered, with shares of Home Depot down 1% and Lowe’s down 2%.
In an interview, Loew CEO Marvin Ellison said people would likely continue to make big investments in their homes.
A possible counter-trend: Remote work has fueled US house prices during the pandemic – so what happens when people return to the office?
Approaching a bear market
The S&P 500 has slipped 18.7% from its closing high on Jan. 3. A drop of 20% would be considered a bear market. (The Nasdaq Composite is already there.) William Watts shares the history of bear markets and considers the likelihood of the next one lasting.
Mark Hulbert looks at the psychology of bear markets – the five stages of grief for investors.
What’s Underlying This Year’s Stock Market Decline
This chart shows how the S&P 500 forward price-to-weighted earnings ratio has changed over the past 10 years. Aside from two brief and dramatic declines, the overall trend was up through 2021.
Mark Hulbert explains why the contraction in the P/E multiple is the real reason for the stock market’s decline this year.
It’s a lot more fun than worrying about the stock market — where should you live in retirement?
Silvia Ascarelli writes the “Where Should I Retire?” column, often looking beyond the box to help people meet a variety of needs when considering locations for their golden years. This week, she’s helping a couple who want to find an affordable place with some culture and access to wilderness areas while avoiding heavy snowfall.
Try MarketWatch’s retirement locator tool for your own personalized research. It includes data for over 3,000 US counties and incorporates dozens of your preferences.
Take a closer look at your retirement account fees
Alessandra Malito is helping a man who is doing a lot to save money for retirement, but has calculated he pays $2,164 a year for the privilege. Here’s his advice on how to take a closer look at investment fees.
More retirement planning: The cost of retiree healthcare is rising – here’s what you should expect to spend
A great idea for housing for the elderly
Here’s a wonderful housing idea that brings families together and reduces expenses.
Contrarian investing: Biotechnology could be close to a bottom
In April 2020, when oil prices for the coming month momentarily dipped below zero, you’d be hard-pressed to imagine paying $5 for a gallon of gasoline two years later. Now, Michael Brush points out that 25% of biotech stocks are trading at valuations below the money they have on the books. Here’s how close this industry could be to a rebound in stock prices.
More trouble for Elon Musk
Tesla CEO Elon Musk continues to argue with Twitter’s board over how many of the company’s social media user accounts may be fake. The drama may be Musk’s basis for negotiating a price lower than his initial $54.20 per share offer for Twitter. Investors don’t expect the deal in its current form to go through, with Twitter shares closing at just $37.29 on May 19.
But Musk’s gamble could cost him far more than $1 billion in severance pay if he walks away from Twitter.
Tesla shares have fallen 28% since April 12, the day before Musk’s bid to Twitter’s board to take the company private. On May 19, Wedbush analyst Daniel Ives, who continues to note that Tesla stock is “outperforming,” cut his price target for the stock by 40% to $1,000. Tesla shares closed at $709.42 on May 19.
More coverage from Musk and Tesla:
How a regional bank went national thanks to the iPhone
Steven Gelsi explains how Citizens Financial Group used the iPhone to build a national payment network with millions of customers.
Where could bitcoin go from here?
In this week’s Distributed Ledger column, Frances Yue describes an improving trading environment for bitcoin and summarizes company disclosures about losses from the stablecoin debacle.
It’s time to act : Terra crash draws Washington’s attention to crypto regulation
Want to tax the rich more? Close a loophole
Some politicians in Washington have discussed the taxation of unrealized capital gains. It could be very complicated and time consuming. Steven M. Rosenthal and Robert McClelland offer a clear and simple plan to tax the unrealized investment gains of the ultra rich upon their death.
A tax trend that helps the rich: IRS audit rates keep dropping, especially for the 1%
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