Retailers are the canary, we're in the coal mine

Look at the cratering of the retail sales, as Macy’s reported its worst quarterly earnings Wednesday and guided much weaker earnings for the rest of the year.

Teen retailer Aéropostale  and Sports Authority  have already filed for bankruptcy this year. Struggling apparel chain Gap had its credit rating cut to junk on Wednesday as well.

“We are not counting on the consumer to spend more,” Macy’s CEO Terry Lundgren said on the call.

The middle class aspirational shopper is not in the stores anymore. They are too hard up trying to make ends meet working two part-time jobs.

The Macy’s CFO said she was scratching her head of the results because of all the positive signs in the US economy. She cited strong job numbers and growing wages.

Well if you can believe the numbers coming out of Washington, you may have an argument, but the numbers are skewed based on faulty data and assumptions that no longer work.

As I have written earlier this month, all this data from retail sales to industrial production point to a recession. Let’s see what the data says at the end of the month.

The yen/dollar roller coaster continues: Up 222 points, down 217 points, up 90 points in pre-market Thursday morning.

The churning this week as the yen yo-yos from 108 to 109 to the dollar has no implications for the broader economy.

You can’t get a read on the state of the US by looking at equities. The bond market has some semblance to reality, but not stocks. Equities and by extension the Forex currency markets can be manipulated through central banks buying or selling futures contracts of the larger indices based on the currency play.

Precious metals move in contrast to the dollar/yen play. Stronger dollar takes gold and silver to the woodshed and the converse is true as well.

If you give me the percentage change in the S&P e-minis futures, I can figure the other asset prices pretty close. It’s not too difficult.