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2021-08-05
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Walmart Set To Benefit From Double-Dip Recession
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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":899008087,"tweetId":"899008087","gmtCreate":1628138983149,"gmtModify":1633753200195,"author":{"id":3563170791847326,"authorId":3563170791847326,"authorIdStr":"3563170791847326","name":"CCloh","avatar":"https://static.tigerbbs.com/66f1a484eca5e26ebaa4095ebe55efdd","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":4,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p><span>[得意] </span><span>[得意] </span><span>[得意] </span></p></body></html>","htmlText":"<html><head></head><body><p><span>[得意] </span><span>[得意] </span><span>[得意] </span></p></body></html>","text":"[得意] [得意] [得意]","highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":1,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/899008087","repostId":1177429885,"repostType":4,"repost":{"id":"1177429885","pubTimestamp":1628135903,"share":"https://www.laohu8.com/m/news/1177429885?lang=&edition=full","pubTime":"2021-08-05 11:58","market":"us","language":"en","title":"Walmart Set To Benefit From Double-Dip Recession","url":"https://stock-news.laohu8.com/highlight/detail?id=1177429885","media":"seekingalpha","summary":"Summary\n\nDiscount retailers could outperform other companies in the consumer staples sector if we en","content":"<p><b>Summary</b></p>\n<ul>\n <li>Discount retailers could outperform other companies in the consumer staples sector if we enter into a double-dip recession.</li>\n <li>Companies that produce essential goods behave differently than discount retailers like Walmart, even though they all fall under the broad umbrella of consumer staples.</li>\n <li>Especially high inflation and rising unemployment could negatively impact consumer staples products more than discount retailers.</li>\n <li>I believe there is a significant risk that the U.S. is facing both high inflation and high unemployment.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/6864289483d7d9bc87c204d258773024\" tg-width=\"768\" tg-height=\"527\" width=\"100%\" height=\"auto\"><span>BanksPhotos/iStock via Getty Images</span></p>\n<p><b>A Good Defensive Option</b></p>\n<p>If you want to hedge the risk that the U.S. is headed for the second half of a double-dip recession that could drag on for a while, and you're worried that inflation could remain high, you might consider opening a position in Walmart (WMT) and accumulating shares on stock price weakness over the next six months.</p>\n<p><b>Consumer Staples Products Vs Discount Retailers</b></p>\n<p>Companies that produce consumer staples tend to hold up well in recessions. This makes sense: people need stuff like soap and toothpaste regardless of the economic environment and they continue to buy essential products even when funds are tight. In downturns, those essential items tend to be purchased at low-cost grocery stores, which is partly why companies like Walmart also tend to perform well in recessions. The average monthly gain of Walmart’s stock over the last four recessions is 1.46%. Over the same stretch, the S&P 500 managed an average monthly return of around .08%</p>\n<p>Consumer staples producers and the discount retailers that sell consumer staples tend to perform well in recessions across the board but, from my perspective, the current inflationary risks in the U.S. could differentiate these two categories in the next downturn. To get a sense of how inoculated these two sectors are against high levels of inflation, I chose to inspect changes in gross profit margin. The chart belows hows profit margins for three low-cost hypermarkets ((WMT)), (COST), (PSMT), and three companies that produce the actual consumer staples that retailers sell (KO), (NSRGY), (PG). Notice that the margins for the hypermarket companies (bottom three lines) and the consumer staples products companies (top three lines) move as two distinct groups.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/023b47832990a5335126d207a38db650\" tg-width=\"640\" tg-height=\"222\" width=\"100%\" height=\"auto\"><span>Source: Seeking Alpha</span></p>\n<p>Two companies, Coca-Cola and Walmart, show gross profit margin data that reaches back to 1979 (left side of the chart). The respective margins of these two companies were closer together then but started to diverge beginning around 1983. I believe this divergence is, in part, explained by changes in inflation. The U.S. experienced high inflation in the late 70s and early 80s that settled down by 1983. Excluding recent readings, inflation figures have remained relatively stable since then. The chart below shows annual readings from the Consumer Price Index For All Urban Consumers between 1979 and 2020.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9fae64ac206910664d985a87487268a3\" tg-width=\"1168\" tg-height=\"450\" width=\"100%\" height=\"auto\"><span>Source: U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: All Items in U.S. City Average [CPIAUCSL], retrieved from FRED, Federal Reserve Bank of St. Louis;Consumer Price Index for All Urban Consumers: All Items in U.S. City Average, August 3, 2021.</span></p>\n<p><b>Why High Inflation Could Bring These Two Groups’ Margins Closer</b></p>\n<p>Although consumer staples are needed in times of recession,<i>especially high inflation may push some consumers to consider alternatives even within the consumer staples category</i>. Coke and Pepsi sit side-by-side on the grocery store shelf, silently competing for your business. Competition pressures margins. In gentle downturns, consumers might pass on buying expensive clothing and instead opt into basic apparel that gets the job done. But in especially bad downturns, I believe that some consumers will comparison shop between the generic brands, too.</p>\n<p>There is always only one supermarket that is closest to you. In other words, Walmart’s physical locations limit competition. Walmart can capture the same respectable margin through recessions and high inflationary environments in part because their physical relationship to your house doesn’t change. They only have to worry about your willingness to go out of your way to get to the second-closest supermarket. To extend the Coke/Pepsi analogy, Walmart isn't sitting right next to another discount retailer on a shelf.</p>\n<p>And when inflation pushes gas prices higher, as it did in 1980 and 1981, there is even more incentive to choose the closest option when grocery shopping. According to an analysis by economist Joe Cortright,higher gas prices result in fewer miles driven. Perhaps you’ve noticed gas prices climbing recently. Consider, too, that Walmart has more stores than any other grocery chain in the United States, making it even more likely that it is the discount retailer that is closest to you. Having so many stores offers Walmart yet another incredible advantage: they can negotiate for lower prices from their suppliers, who know they can sell far more goods if they distribute through Walmart. Being able to offer the lowest price at the most convenient locations is a fantastic combination for a business in recessionary times.</p>\n<p><b>I Think A Long Recession Is On The Horizon</b></p>\n<p>I was somewhat surprised that NBER assessed the duration of the most recent recession to be just two months: February and March of 2020. Although unemployment declined sharply in April of 2020, the overall unemployment rate was still above 13%. Even now, the headline unemployment rate is just shy of 6%. For context, before the recession started, the unemployment number was 3.5%. Across the Federal Reserve’s U-3 unemployment series, I wasn’t able to find another instance of unemployment being at 13% in a time that wasn’t a recession. Actually, that number was the second-highest unemployment reading in the whole series, second only to the prior month, which came in above 14%. This might suggest that the<i>slope</i>of the unemployment curve, and not the flat number without context, plays an important role in NBER’s calculation for recession start and end times. If so, we would do well to notice that the most recent set of unemployment numbers are trending sideways and even ticked higher in April and June.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/adbef4c9e407fe5d05ce4094e19ef6a4\" tg-width=\"640\" tg-height=\"247\" width=\"100%\" height=\"auto\"><span>Source: U.S. Bureau of Labor Statistics, Unemployment Rate [UNRATE], retrieved from FRED, Federal Reserve Bank of St. Louis;https://fred.stlouisfed.org/series/UNRATE, August 2, 2021.</span></p>\n<p>But unemployment is just one indicator. I also wanted to know what other indicators were suggesting. The graphic below shows twenty-five years of machine learning-generated recession forecasts using a database of around half a million economic data points and more than 50 years of monthly data. The model demonstrates good predictive capabilities for indicating the start dates of recessions. Notice how recent forecasts (the top three lines) show risk creeping forward in time. My current interpretation of the model is that the U.S. is facing an elevated chance of being in a recession in about six months.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5c58be143803459e60bcd19efb7b7039\" tg-width=\"640\" tg-height=\"4403\" width=\"100%\" height=\"auto\"><span>Source: I made this graphic myself using data from the Federal Reserve Bank of St. Louis.</span></p>\n<p>In response to the most recent recession, the Federal Reserve dropped the Effective Federal Funds Rate to almost zero. In 2008, after the so-called “Great Recession”, The Fed Funds Rate hovered near zero for more than six years before the Fed was able to start tightening monetary policy. They moved slowly and deliberately then, and still only managed to raise rates up to 2.45% over the course of around three and half years. Note that the Federal Reserve started lowering rates meaningfully in August of 2019 before the world went into lockdown mode. The most recent recession ended a little more than a year ago. If we are facing a double-dip recession, something that happened in the U.S. in the 1980s, the Federal Reserve’s ability to support the economy by lowering rates would be seriously limited by the low starting point of the current rate. Since July of 1954, the start date of the Fed Funds Rate data set, the U.S. has never entered a recession with rates effectively at the zero bound. Presuming the stimulus the Fed provides during downturns works in promoting economic rebounds, it stands to reason that a suffering economy that can’t be stimulated with lower interest rates might persist in its suffering state for a while. If the next recession lasts for a prolonged period of time, consumer staples also stand to benefit for a prolonged period of time.</p>\n<p><b>I Think Inflation Will Remain High For A While</b></p>\n<p>From my perspective, there is at least some risk that the high inflation we’re experiencing now is somewhat persistent. I asked my forecasting model to generate two and a half decades-worth of yearly percent change predictions for the Personal Consumption Expenditures series. The model has demonstrated good predictive accuracy for the last 25 years worth of forecasts. A quick scroll through the whole image contextualizes recent forecasts, which are noticeably irregular and somewhat alarming.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e2b83f099756c8bc50a51473ce2c2717\" tg-width=\"640\" tg-height=\"3494\" width=\"100%\" height=\"auto\"><span>Source: I made this graphic myself using data from the Federal Reserve Bank of St. Louis.</span></p>\n<p>Recall that the unemployment rate is moving sideways at the moment. If the cost of a wide range of goods and services continues to rise and unemployment stays near 6% or even starts to move higher, an increasing number of people will seek out the cheapest options for essential goods.Inflation can lead to higher wages, which mitigates rising costs for people who are employed. Unemployed people, however, just feel the sting of rising living expenses. If consumer prices rise while employment falls, something that happened in the late 70s and 80s, more people will need to seek out low-cost essential items and, I believe, will comparison shop within that segment. If we are headed for an economic environment in the U.S. that is similar to the late 70s and early 80s, as I suspect, Walmart stands to shine within the consumer staples segment.</p>\n<p><b>Risks</b></p>\n<p>I think most people would say that Amazon (AMZN) is the biggest threat to Walmart. In the last recession, more people ordered what they needed online, which significantly boosted Amazon’s gross profits. In the March 2020 quarter, Amazon posted a 21% year-over-year profit increase. That number jumped to a 34% yearly increase in the June quarter of 2020. If the next recession features health restrictions that are similar to the last recession, and online shopping is again en vogue, it could be argued that Amazon stands to gain both from increased sales and from more people familiarizing themselves with Amazon’s online interface and service.</p>\n<p>It’s also entirely possible that a recession and high inflation aren’t on the horizon. If you scan the entirety of my forecast graphics, you will notice periods of time where the forecasts were early, late, or outright wrong. If this is the case, the real risk to this trade is the opportunity cost of not being invested in something that offered more growth potential in an expansionary environment.</p>\n<p><b>Bring It Together</b></p>\n<p>If a recession strikes soon, unemployment will likely be starting from a higher low compared to 2020, and the Fed Funds Rate would likely be starting at a lower high. This suggests to me that even more people will need to pinch pennies compared to other recessions. Because the Fed has a limited ability to lower interest rates at the moment, I suspect the next recession we encounter in the U.S. will last for a while. And if they try to taper asset purchases, I believe the economy will crater harder and faster. This pressures the Federal Reserve to continue to inflate the money supply. All of this, taken together, points to a positive environment for discount retailers within the consumer staples segment. While many companies in this category may benefit,Walmart tops its peers according to the Seeking Alpha quant rating. Walmart’s huge number of physical locations and ability to negotiate low costs from suppliers set them up well if we're facing a prolonged period of acute economic hardship. Even if consumers are forced into lockdowns, I still think Walmart is a solid investment. In the last recession,72% of people still went to actual grocery stores despite the health risks. I’ve opened a small position in Walmart and plan to add to my position over the next six months if the stock trades sideways for a while or dips lower.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Walmart Set To Benefit From Double-Dip Recession</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWalmart Set To Benefit From Double-Dip Recession\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-08-05 11:58 GMT+8 <a href=https://seekingalpha.com/article/4445026-walmart-set-to-benefit-from-double-dip-recession><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nDiscount retailers could outperform other companies in the consumer staples sector if we enter into a double-dip recession.\nCompanies that produce essential goods behave differently than ...</p>\n\n<a href=\"https://seekingalpha.com/article/4445026-walmart-set-to-benefit-from-double-dip-recession\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"WMT":"沃尔玛"},"source_url":"https://seekingalpha.com/article/4445026-walmart-set-to-benefit-from-double-dip-recession","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1177429885","content_text":"Summary\n\nDiscount retailers could outperform other companies in the consumer staples sector if we enter into a double-dip recession.\nCompanies that produce essential goods behave differently than discount retailers like Walmart, even though they all fall under the broad umbrella of consumer staples.\nEspecially high inflation and rising unemployment could negatively impact consumer staples products more than discount retailers.\nI believe there is a significant risk that the U.S. is facing both high inflation and high unemployment.\n\nBanksPhotos/iStock via Getty Images\nA Good Defensive Option\nIf you want to hedge the risk that the U.S. is headed for the second half of a double-dip recession that could drag on for a while, and you're worried that inflation could remain high, you might consider opening a position in Walmart (WMT) and accumulating shares on stock price weakness over the next six months.\nConsumer Staples Products Vs Discount Retailers\nCompanies that produce consumer staples tend to hold up well in recessions. This makes sense: people need stuff like soap and toothpaste regardless of the economic environment and they continue to buy essential products even when funds are tight. In downturns, those essential items tend to be purchased at low-cost grocery stores, which is partly why companies like Walmart also tend to perform well in recessions. The average monthly gain of Walmart’s stock over the last four recessions is 1.46%. Over the same stretch, the S&P 500 managed an average monthly return of around .08%\nConsumer staples producers and the discount retailers that sell consumer staples tend to perform well in recessions across the board but, from my perspective, the current inflationary risks in the U.S. could differentiate these two categories in the next downturn. To get a sense of how inoculated these two sectors are against high levels of inflation, I chose to inspect changes in gross profit margin. The chart belows hows profit margins for three low-cost hypermarkets ((WMT)), (COST), (PSMT), and three companies that produce the actual consumer staples that retailers sell (KO), (NSRGY), (PG). Notice that the margins for the hypermarket companies (bottom three lines) and the consumer staples products companies (top three lines) move as two distinct groups.\nSource: Seeking Alpha\nTwo companies, Coca-Cola and Walmart, show gross profit margin data that reaches back to 1979 (left side of the chart). The respective margins of these two companies were closer together then but started to diverge beginning around 1983. I believe this divergence is, in part, explained by changes in inflation. The U.S. experienced high inflation in the late 70s and early 80s that settled down by 1983. Excluding recent readings, inflation figures have remained relatively stable since then. The chart below shows annual readings from the Consumer Price Index For All Urban Consumers between 1979 and 2020.\nSource: U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: All Items in U.S. City Average [CPIAUCSL], retrieved from FRED, Federal Reserve Bank of St. Louis;Consumer Price Index for All Urban Consumers: All Items in U.S. City Average, August 3, 2021.\nWhy High Inflation Could Bring These Two Groups’ Margins Closer\nAlthough consumer staples are needed in times of recession,especially high inflation may push some consumers to consider alternatives even within the consumer staples category. Coke and Pepsi sit side-by-side on the grocery store shelf, silently competing for your business. Competition pressures margins. In gentle downturns, consumers might pass on buying expensive clothing and instead opt into basic apparel that gets the job done. But in especially bad downturns, I believe that some consumers will comparison shop between the generic brands, too.\nThere is always only one supermarket that is closest to you. In other words, Walmart’s physical locations limit competition. Walmart can capture the same respectable margin through recessions and high inflationary environments in part because their physical relationship to your house doesn’t change. They only have to worry about your willingness to go out of your way to get to the second-closest supermarket. To extend the Coke/Pepsi analogy, Walmart isn't sitting right next to another discount retailer on a shelf.\nAnd when inflation pushes gas prices higher, as it did in 1980 and 1981, there is even more incentive to choose the closest option when grocery shopping. According to an analysis by economist Joe Cortright,higher gas prices result in fewer miles driven. Perhaps you’ve noticed gas prices climbing recently. Consider, too, that Walmart has more stores than any other grocery chain in the United States, making it even more likely that it is the discount retailer that is closest to you. Having so many stores offers Walmart yet another incredible advantage: they can negotiate for lower prices from their suppliers, who know they can sell far more goods if they distribute through Walmart. Being able to offer the lowest price at the most convenient locations is a fantastic combination for a business in recessionary times.\nI Think A Long Recession Is On The Horizon\nI was somewhat surprised that NBER assessed the duration of the most recent recession to be just two months: February and March of 2020. Although unemployment declined sharply in April of 2020, the overall unemployment rate was still above 13%. Even now, the headline unemployment rate is just shy of 6%. For context, before the recession started, the unemployment number was 3.5%. Across the Federal Reserve’s U-3 unemployment series, I wasn’t able to find another instance of unemployment being at 13% in a time that wasn’t a recession. Actually, that number was the second-highest unemployment reading in the whole series, second only to the prior month, which came in above 14%. This might suggest that theslopeof the unemployment curve, and not the flat number without context, plays an important role in NBER’s calculation for recession start and end times. If so, we would do well to notice that the most recent set of unemployment numbers are trending sideways and even ticked higher in April and June.\nSource: U.S. Bureau of Labor Statistics, Unemployment Rate [UNRATE], retrieved from FRED, Federal Reserve Bank of St. Louis;https://fred.stlouisfed.org/series/UNRATE, August 2, 2021.\nBut unemployment is just one indicator. I also wanted to know what other indicators were suggesting. The graphic below shows twenty-five years of machine learning-generated recession forecasts using a database of around half a million economic data points and more than 50 years of monthly data. The model demonstrates good predictive capabilities for indicating the start dates of recessions. Notice how recent forecasts (the top three lines) show risk creeping forward in time. My current interpretation of the model is that the U.S. is facing an elevated chance of being in a recession in about six months.\nSource: I made this graphic myself using data from the Federal Reserve Bank of St. Louis.\nIn response to the most recent recession, the Federal Reserve dropped the Effective Federal Funds Rate to almost zero. In 2008, after the so-called “Great Recession”, The Fed Funds Rate hovered near zero for more than six years before the Fed was able to start tightening monetary policy. They moved slowly and deliberately then, and still only managed to raise rates up to 2.45% over the course of around three and half years. Note that the Federal Reserve started lowering rates meaningfully in August of 2019 before the world went into lockdown mode. The most recent recession ended a little more than a year ago. If we are facing a double-dip recession, something that happened in the U.S. in the 1980s, the Federal Reserve’s ability to support the economy by lowering rates would be seriously limited by the low starting point of the current rate. Since July of 1954, the start date of the Fed Funds Rate data set, the U.S. has never entered a recession with rates effectively at the zero bound. Presuming the stimulus the Fed provides during downturns works in promoting economic rebounds, it stands to reason that a suffering economy that can’t be stimulated with lower interest rates might persist in its suffering state for a while. If the next recession lasts for a prolonged period of time, consumer staples also stand to benefit for a prolonged period of time.\nI Think Inflation Will Remain High For A While\nFrom my perspective, there is at least some risk that the high inflation we’re experiencing now is somewhat persistent. I asked my forecasting model to generate two and a half decades-worth of yearly percent change predictions for the Personal Consumption Expenditures series. The model has demonstrated good predictive accuracy for the last 25 years worth of forecasts. A quick scroll through the whole image contextualizes recent forecasts, which are noticeably irregular and somewhat alarming.\nSource: I made this graphic myself using data from the Federal Reserve Bank of St. Louis.\nRecall that the unemployment rate is moving sideways at the moment. If the cost of a wide range of goods and services continues to rise and unemployment stays near 6% or even starts to move higher, an increasing number of people will seek out the cheapest options for essential goods.Inflation can lead to higher wages, which mitigates rising costs for people who are employed. Unemployed people, however, just feel the sting of rising living expenses. If consumer prices rise while employment falls, something that happened in the late 70s and 80s, more people will need to seek out low-cost essential items and, I believe, will comparison shop within that segment. If we are headed for an economic environment in the U.S. that is similar to the late 70s and early 80s, as I suspect, Walmart stands to shine within the consumer staples segment.\nRisks\nI think most people would say that Amazon (AMZN) is the biggest threat to Walmart. In the last recession, more people ordered what they needed online, which significantly boosted Amazon’s gross profits. In the March 2020 quarter, Amazon posted a 21% year-over-year profit increase. That number jumped to a 34% yearly increase in the June quarter of 2020. If the next recession features health restrictions that are similar to the last recession, and online shopping is again en vogue, it could be argued that Amazon stands to gain both from increased sales and from more people familiarizing themselves with Amazon’s online interface and service.\nIt’s also entirely possible that a recession and high inflation aren’t on the horizon. If you scan the entirety of my forecast graphics, you will notice periods of time where the forecasts were early, late, or outright wrong. If this is the case, the real risk to this trade is the opportunity cost of not being invested in something that offered more growth potential in an expansionary environment.\nBring It Together\nIf a recession strikes soon, unemployment will likely be starting from a higher low compared to 2020, and the Fed Funds Rate would likely be starting at a lower high. This suggests to me that even more people will need to pinch pennies compared to other recessions. Because the Fed has a limited ability to lower interest rates at the moment, I suspect the next recession we encounter in the U.S. will last for a while. And if they try to taper asset purchases, I believe the economy will crater harder and faster. This pressures the Federal Reserve to continue to inflate the money supply. All of this, taken together, points to a positive environment for discount retailers within the consumer staples segment. While many companies in this category may benefit,Walmart tops its peers according to the Seeking Alpha quant rating. Walmart’s huge number of physical locations and ability to negotiate low costs from suppliers set them up well if we're facing a prolonged period of acute economic hardship. Even if consumers are forced into lockdowns, I still think Walmart is a solid investment. In the last recession,72% of people still went to actual grocery stores despite the health risks. I’ve opened a small position in Walmart and plan to add to my position over the next six months if the stock trades sideways for a while or dips lower.","news_type":1},"isVote":1,"tweetType":1,"viewCount":331,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"upFlag":false,"length":18,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/899008087"}
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