I woke up this morning and ran across this news:
U.S. stock-index futures fell after Target Corp. said December sales may decline, spurring concern that last-minute Christmas shopping failed to save retailers from the slowest holiday season in five years.
If you've been a reader of my free e-letter called "My Two Cents", then you know that I've been warning about slowing retail sales in the U.S. recently. I noted that the stocks of both Target (TGT) and Kohls (KSS) were hitting 52 week lows in a time of the year when they should be hitting 52 week highs.
This means the smart money has an inside scoop and knows what's up. They've been selling these giant, far reaching, retailers for quite some time now because they know what I know. They know that the U.S. consumer is already tightening their belt over the economic slow down in the U.S.
However, this is only going to accelerate. For no employer wants to look like the grinch and fire people right before or at Christmas so they wait until after the new year gets under way. You'll see layoffs start to take place in January and February, not just in retail, but all over the U.S. economy.
So far, the U.S. economy has held up through a credit crunch, housing slump, etc. because consumer spending was the glue still holding it all together. However, if this 3rd leg gets yanked out from under the stool, then it's not going to be pretty.
If the consumer tightens their belt as I believe they will, then you'll most likely see a recession in 2008. S
Since economic data lags, you'll usually not know for sure that you were in one until you've been in it for a while and possibly are almost out of it. Don't get me wrong, you'll feel the effects of it....but having the statistical proof is what I'm referring to.
Look for the U.S. slow down to spill over into the global economy. It will end up affecting other countries and their economies. It's going to get a lot more ugly before it gets prettier.
However, as things improve, you'll be hearing from me and I'll shout that from the roof tops also. For I'm not a "gloom and doom" writer but only one that calls things as I see them. For I don't worry about being political. Too many out there won't or can't say what they think. To me, this is the invaluable difference that you get as a reader of my free blog.
If you want even more detail that translates into exact trades into the forex/currency market, then check out my website at www.money-trader.com.
Sean Hyman
Currency Director, The Sovereign Society
Editor/Trader, the Money Trader
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