Tags: Wal-Mart | Davidowitz | economy | jobs

Retail Expert Davidowitz: Wal-Mart's Woes Stem From Economy in 'State of Collapse'

Thursday, 15 Aug 2013 01:28 PM

By Dan Weil

Wal-Mart issued weak earnings news Thursday, but the company isn't doing anything wrong, says Howard Davidowitz, chairman of retail consultant Davidowitz & Associates. It's merely suffering from a weak economy.

"Wal-Mart is a terrific operator," Davidowitz tells Yahoo. "They didn't suddenly become stupid. ... The economy is in a state of collapse. That's what's going on."

The world's biggest retailer cut its full-year profit forecast after second-quarter profit came in below analysts' expectations.

Editor’s Note:
Buy These 4 Stocks Before 399% Stock Market Rally!

The employment situation illustrates the weakness of the U.S. economy. Of the new jobs generated this year, 75 percent are low-wage, part-time, Davidowitz explains.

Real unemployment, including those who have stopped looking for work and are working fewer hours than they want, is 14 percent, he adds.

"Business is bad in America," Davidowitz notes. "Look at our GDP [gross domestic product] growth. We're growing at 1.5 percent. That means we can't produce jobs."

The economy expanded at an average rate of 1.4 percent in the first and second quarters.

"I don't think we're in a recession right now, but I think there's a 50 percent chance we'll be in a recession next year," Davidowitz predicts.

Meanwhile, government debt has exploded to $17 trillion, he notes. "We've spent all the money, we've borrowed all the money and we're in the tank."

To be sure, some experts say Wal-Mart is responsible for its own difficulties. Brian Sozzi, chief equities strategist at Belus Capital Advisors puts the blame on Wal-Mart's activity overseas and in e-commerce.

"Investments to address international, from uncompetitive prices and poorly laid out stores, continue with no visible sign they are driving improved results, while the company is pouring large sums of money into e-commerce to compete with Amazon," he writes in a report obtained by Business Insider.

Editor’s Note: Buy These 4 Stocks Before 399% Stock Market Rally!

© 2015 Moneynews. All rights reserved.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Hulbert: Quality Small-Cap Stocks Still Make Sense

Monday, 26 Jan 2015 14:45 PM

A variety of research has shown that small-cap stocks outperform large-caps during the very long term , the last 88 year . . .

Microsoft's Core Goes Soft, as it Focuses on Cloud Transition

Tuesday, 27 Jan 2015 07:15 AM

The main engine of Microsoft Corp's historic earnings power - selling Windows and Office to big businesses - is showing  . . .

Goldman's Cohen: '2015 Will Be Better for Equities Than Bonds'

Monday, 26 Jan 2015 12:12 PM

Many experts expect stocks to fare better than bonds do this year, and Abby Joseph Cohen, renowned senior investment str . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved