The financial media wanted you to believe that the consumer is still strong. They pointed to data that showed robust spending at retailers this past April.

What they failed to tell you? Those dollars had not been adjusted for inflation.

When one accounts for skyrocketing increases in the things that families buy, the data look less impressive. A lot less impressive.

Families may be spending more because they have to spend more. Or think that they have to.

(Better get it now before the price goes up next week or next month. Heck, they might not even have it on the shelves later!)

Unfortunately, investors are learning that “hot sales” may not be synonymous with “hot profits.” Walmart and Target have already blamed inflation for the hits to their respective bottom lines.

The inflation excuse is not helping share prices. You would have to go back to the 1987 crash to witness single-day/two-day destruction similar to what Walmart (WMT) and Target (TGT) are currently experiencing.

In the big picture, Walmart and Target are simply “catching down” to the majority of S&P 500 constituents. More than half have dropped 20%-plus from highwater marks.

Indeed, this is the stuff that stock bears are made of.


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