Then at 2:00pm Friday, an internal Wal-Mart e-mail leaked. Jerry Murray, Wal-Mart’s vice president of finance and logistics, said in a February 12 e-mail to other executive, “In case you haven’t seen a sales report these days, February MTD sales are a total disaster. The worst start to a month I have seen in my ~7 years with the company.” Boom, Wal-Mart stock started to slide immediately and it took the whole market with it. Again, the market showed its unbelievable resilience as it steadily pared losses into the close. The S&P500 was down on the day but was up for the week, the 7th consecutive weekly gain, the first since 21-January-11.
Wal-Mart reports earnings pre-market on Thursday February 21. It will be interesting to hear what they have to say in the conference call especially about their sales trend. The dollar stores (DG, DLTR, FDO) have been hit hard since late last year on worries about the impact on their low-end customers from the rise in the payroll tax starting January 1. Wal-Mart e-mail seems to suggest that the tax "hike" is having an impact. An additional factor that might be impacting low-middle income consumers is the delay in tax refunds from the IRS. As of February 3rd, only $4 billion refund had been mailed, down from $27 billion mailed at this point last year - that's down a whopping $23 billion.
