Are Wal-Mart Stores, Inc. (WMT) Sales The Canary in the Coal Mine?

Businesses believed this would happen in January when the tax increase took place, and were mildly relieved when sales ticked up, according to this Washington Post column.

Maybe the rise in gas prices exacerbated the tax hike; maybe people held their noses and put a little extra down on their credit card in January- an action not sustainable for terribly long, though lord knows we’ve tried as both individuals and a country

Either way, this is the effect of public (government) spending crowding out private. We as a country (and world) have spent beyond our means for so long that a day of reckoning is coming. At some point we have to pay back, thus the payroll tax hike, or as some might call it, “a return to normal social security tax rates.” Responsible? Maybe. But this is why economists like Paul Krugman are so vehemently against austerity measures believing they will put a stalled economy into a downward dive.

To me, this is an illustration of why the market, and all consumer stocks are vulnerable. What I would be very curious to know is whether some of these sales have shifted online (especially given the gas hike,) and how Amazon.com, Inc. (NASDAQ:AMZN) fared during this time period.

And of course, it’s just one leaked email, but as an investor it is important to be aware of how tax policy can have macro-economic impacts and affect the value of your portfolio.

The article Are Wal-Mart Sales The Canary in the Coal Mine? originally appeared on Fool.com and is written by Margie Nemcick-Cruz.

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