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George Chamberlin's Money in the Morning

Turns out stocks don't go up -- or down -- forever. After seven consecutive trading sessions to the upside, the Dow industrials declined yesterday by 50 points, or 0.3 percent. The small decline brought out a lot of the permabears who had gone into hiding during the early October rally. To be sure, there probably will be more volatility as we get closer and closer to the next Fed meeting in two weeks. If comments from Fed officials are any guide, it is very unlikely there will be a rate hike this month or before the end of the year.


Stocks are being dragged down this morning, led by a 9 percent decline in shares of Wal-Mart, one of the 30 stocks in the Dow industrials. The company's CEO said 2016 earnings could be down as much as 12 percent as the retailer tries to make changes to attract more shoppers. Wal-Mart will use this selloff to increase the buyback of its shares by another $20 billion.

The "experts" out there are overreacting to the August report on retail sales. The headline number shows sales were up by just 0.1 percent, suggesting in their minds that consumers have run out of steam and are on the brink of bankruptcy. Turns out spending for autos, apparel and dining were up sharply. The decline was in gasoline spending. Of course, most "experts" are rarely in their limos when the driver stops to fill up the tank. Otherwise they would know the only reason gas sales were down is because prices have plummeted. People are buying just as much gas as before, probably more, but they are paying much less. As an example, I stopped for gas this morning and spent $27 to fill up. A couple of months ago that would have been close to $40. Does that mean I was buying less gasoline? Nope, I was just getting more for my money. That is money I will spend somewhere else.

Martha Stewart is saying one of her biggest business mistakes was not buying Kmart. Not just a few shares, but the whole darned company. For 10 years back in the late 1990s Martha had an exclusive marketing agreement with Kmart. The deal went sour and Martha began selling her wares at other stores like Macy's, Home Depot and Michaels. In an AP interview the domestic diva said, "We thought about buying it, but we didn't do it, and we should have. That could have been our stores, K-Martha!" Stewart is in the process of selling her company to Sequential Brands.

Interesting survey from Piper Jaffray on teen spending. While many people might be surprised by some of the results, as the grandparent of a pre-teen I find it spot on. For instance, the top restaurant choice in the survey is Starbucks, which happens to by my granddaughter Sophia's favorite place to eat. Next on the list is Chipotle, followed by Chick-fil-A, McDonald's and Panera Bread. Sophia and I take a pass on Chipotle but she loves Chick-fil-A and Panera Bread. No interest in McDonald's. Also, her favorite place to shop online is Amazon.com, which also tops the Piper survey.

It was very exciting last night. No, not the Democratic debate, but rather the game between the Dodgers and the Mets. The Boys in Blue won behind a strong pitching performance by Clayton Kershaw. The teams come back to L.A. tomorrow to the deciding game in the series to determine who will move on in the playoffs.

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