cmharkey

S&P500 vs. Retail (Discretionary Spending vs. Economy Growth)

NYSE:JCP   PENNEY (JC) CO INC
In past market recoveries and or market growth we see a confirmation that the economy is growing as well by looking at how retail companies perform. For example J C Penny performed extremely well before the Dot-Com bust and was also able to recover very well before going into the Housing Bubble.

Post the housing bubble, the economy has been inflated due to FED manipulation.
Job growth and wage growth cannot be growing at the level the government reports simply due to the lack of discretionary spending by the mass population. If we truly were getting back on track with the number of people employeed and were also on track with wage growth then a stock like JCP should be growing...not shrinking.

Also...very surprisingly, a sudden loss in profits from JCP preceded the market burst on BOTH occasions.
Granted we cannot use the same logic to a market where JCP stock doesn't rise (to compare to S&P pending fall), we should still keep this in consideration for the next time retail sales SUDDENLY slow.

Comments

Further analysis of JCP shows the company overall to be suffering.
This looks more like an isolated event when compared to other retail stores (Macys).
I think JCP is simply in financial trouble and the directors haven't figured out a way to become profitable again.

This was a miss on my part, should have been looking at the fundamentals as well.
Check their quarterly reports to note this problem.
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The more I think about it...maybe we can consider the slack performance of JCP through QE phases to reflect more than one thing. It does show the market "trying" to prop up JCP during that time (minus the 2013-14 run). Then shows a sharp decline into current price ranges.

Maybe the more important indicator is that JCP has hit all time lows in Feb 2014?
During a year where all other stocks soared in recovery, JCP did almost nothing.
This COULD be a similar sign as before, only presented slightly differently.
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