1) What's up with retail? Now Wal-Mart disappoints.
Both Wal-Mart and Kohls guided lower, just a day after Macy's did the same yesterday. For its part, Wal-Mart said "the retail environment was challenging across all of our markets." Meanwhile, earnings were in line with expectations, but revenues were light.
The real problem was in same-store sales, which dropped 0.3 percent, well below expectations of a gain of 1 percent. Third quarter guidance of $1.11 to $1.16 is below expectations, as is the full year guidance of $5.10-$5.30; that checked in below previous estimates of $5.20-$5.40.
Next year's sales figures weren't much better: those were lowered to two to three percent, from previous guidance of a five to six percent gain.
Remember, Wal-Mart is 20 percent of total retail sales of publicly held companies.
David Berman of Berman Capital, who appeared with my colleague David Faber on Squawk on the Street on Monday, said retail earnings would be "horrible," and so far he is right.
Things were bad in department stores like Macy's; now they are bad in the biggest discounters like Wal-Mart. And we know teen retailers are bad already.
Berman made an interesting point: the consumer is not that weak, but the traditional retailers are. Consumers are are buying cars, houses, and they are buying goods on the Internet from companies like Amazon.
And they are buying home improvement items from companies like Home Depot and Lowe's, which will be out next week.
Buying is happening -- but just not from traditional retailers.