The shocking truth about Wal-Mart and gasoline prices

Gasoline prices are at their lowest levels since February. But while that might spell relief for consumers, surprisingly, it may not benefit the world's largest retailer.

Over the past two weeks, the price of gasoline fell nearly 9 cents based on data compiled by the Lundberg Survey. The average price of gasoline in the United States is $3.3741 per gallon. Conventional wisdom holds that gasoline prices move inversely to retail sales. Thus, lower gasoline prices should mean more sales ahead for the world's largest retailer, Wal-Mart.

(Read: US gas prices fall, extending summer decline)

However, a closer look at the charts suggests otherwise.

"Intuitively, you might think lower prices at the pump [means] more money in your pocket [and consumers] go out to Wal-Mart and buy some more stuff," said Rich Ross, global equity strategist at Auerbach Grayson and a "Talking Numbers" contributor. "But that's not really how it has worked for about the last 10 years. What we've seen is a very strong correlation in the same direction between commodities like gasoline and the price of equities like Wal-Mart."

To be sure, gasoline prices and Wal-Mart's share prices don't move perfectly together but are roughly where they were at the start of the year. Wholesale gasoline futures are down 8 percent on the year, while Wal-Mart shares are down 2.5 percent year-to-date. Contrast that with the broad market S&P 500 index which has gained almost 8 percent so far in 2014.

(Read: Wal-Mart ups holiday staffing; Target, Penney's flat)

"It's not a perfect match but in general, the trends move in the same direction," said Ross, looking at a five-year chart of Wal-Mart stock versus the price of reformulated blended gasoline contracts (RBOB). "Higher gasoline has corresponded roughly with higher equity prices and vice versa, which is the situation we're seeing today where gasoline and other commodities are breaking down. They're eroding as a sign of weakening demand, a weaker economy, etc., and Wal-Mart is commensurately moving lower."

Gina Sanchez, founder of Chantico Global, also says there is a fundamental misunderstanding about the price of gasoline and retail spending.

"Everyone wants to say that a penny at the pump causes a billion dollars of spending," said Sanchez, a CNBC contributor. "That statistic is like 15 years old, and I think it's hilarious that people continue to say it. Intuitively you would think that. However, over the last five years, I think that gasoline has been more an indication of demand."

That demand, in turn, has been weak, according to Sanchez. "We've had a situation where a lot of people lost their jobs," she said. "Wages have been slow to grow. Because of that, people have been slow to spend. We've seen that not online in the retail space but in the commodities space."

One example Sanchez cites is natural gas, which after a spike during the "polar vortex" this past winter, is now down 9 percent for the year. "Commodity prices are barely showing a pulse right now and that's a sign of weak demand, and that really hurts companies like Wal-Mart," she said. "They need demand. Without that, we continue to see a decline in same-store sales…. This is an uphill battle for Wal-Mart right now."

To see the full discussion on Wal-Mart and gasoline prices, with Ross on the technicals and Sanchez on the fundamentals, watch the above video.

-----
Follow us on Twitter: @CNBCNumbers
Like us on Facebook: facebook.com/CNBCNumbers