Analysis believes that currently the 'Walmart recession signal' cannot accurately indicate a recession. First, there is controversy over the index selected for this indicator. Second, the luxury goods industry trends have changed, with the industry facing overall pressure. Third, Walmart's own business model is continuously evolving, shifting towards expanding high-margin businesses.
Amid repeated warnings of economic recession, the US economy continues to demonstrate resilience. Will this 'Walmart recession' signal also prove ineffective?
Currently, the 'Walmart recession signal' (WRS) is at its highest level since the early stages of the pandemic, sounding the alarm for a recession. So far this year, Walmart's stock price has been soaring, rising by 80%, while the S&P Global Luxury Goods Index has remained relatively stable, a significant increase in this indicator.
"Walmart Decline Signal" was proposed by former Wells Fargo & Co asset management strategist Jim Paulsen. This indicator predicts economic recession risk by comparing the relative performance of Walmart (WMT.US) stock price with the Luxury Goods Stocks Index.
Paulsen believes:
With the slowdown of economic activity and escalating recession risks, retail purchasing patterns tend to move closer to discount stores like Walmart and further away from luxury goods retailers, hence the rise of WRS may indicate potential recession.
However, can this indicator really predict an economic recession?
Three major limitations of the 'Walmart Recession Signal'.
According to media reports and analysis on Thursday, it was found after in-depth investigation that this Index has some limitations.
Firstly, the standards used by WRS - S&P Global Luxury Goods...

Looking forward, the variety of products that can be purchased in personal retirement accounts has increased.
On December 12, the Ministry of Human Resources and Social Security, Ministry of Finance, State Administration of Taxation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission and other five departments jointly issued a notice on the comprehensive implementation of the personal retirement pension system, which will be implemented nationwide on December 15.
In this expansion of the investment scope, Index Funds have been included in the investment scope.
As of press time, A-shares in Hk are all rising, with Hang Seng Index (800000.HK) up 1.67%, Hang Seng TECH Index (800700.HK) up 2.39%.
The person in charge of the personal Retirement business at GF Fund expressed that from the perspective of product expansion, on one hand, index funds in recent years are being increasingly recognized by more investors for their clear style, low fees, etc., and including index funds in the scope of personal Retirement can provide more diversified choices for individual investors, making it easier for investors to reasonably arrange Retirement assets from the perspective of Retirement asset allocation, with the ultimate goal of increasing the Retirement replacement rate; on the other hand, from the perspective of nurturing and guiding more medium and long-term funds into the market, Retirement funds are truly long-term funds. Opening up the path for personal Retirement funds to invest in index funds can also bring more incremental funds to the market, thereby enhancing market stability.
E Fund Fund believes that including index funds in personal retirement...

① UBS believes that the high valuation of US stocks is reasonable and may continue to rise next year; ② Factors such as the dominant position of technology stocks, improvement in cash flow, and low discount rates explain the reasons for the high valuation of US stocks.
As 2024 draws to a close, putting aside this year's strong rally, many professionals are concerned about the high valuation of US stocks. However, UBS seems to think differently. The bank points out that the US stock prices are reasonable and will continue to rise.
Currently, the expected PE ratio of the S&P 500 Index is 22.2 times, much higher than the average level of 16.8 times in the past 30 years, approaching the historical high of 25.0 times set during the Internet bubble in 1999.
Wall Street strategists have repeatedly warned that such high valuations imply a correction in the US stock market, and even a slight interruption in the uptrend could lead to painful crashes in US stocks.
However, UBS strategists led by Jonathan Golub pointed out in the latest report released on Monday that such high stock valuations are reasonable and will continue to climb next year.
They first pointed out that the dominance of tech stocks in the S&P 500 Index is increasing.
Strategists explain that about 30 years ago, before the rise of the internet and the emergence of smart phones, tech-related companies accounted for only 10% of the market cap of the S&P 500 Index, whereas now they account for 40%. At the same time, relatively...