Business

Last week, WalMart doubled down on the wage hike debacle when the world’s largest retailer decided to give everyone a raise in February.

The all-in cost will be around $2.7 billion. While some were surprised at the move, it was easy to see coming. Indeed, we’ve long said that the company’s decision to hike wages for its lowest-paid employees would eventually necessitate similar raises for workers higher up the corporate ladder.

With Ray Dalio warning that QE no longer works:

"it is difficult to push the prices of these assets up and it is easy to have them fall. And when they fall, there is a negative impact on economic growth. When debt levels cannot be increased without reducing spending — stimulating demand is more difficult."

It might behoove some investors to "hedge" as opposed to BTFD in FANGs. As BofAML's Jason Galazidis explains,

"Do not worry," investors are told day after day, this is just a swoon because companies are blacked out from buying back their own shares and supporting the irrational valuations in stock markets. Well, Credit Suisse just smashed another leg on the 2-legged stool of equity market perma-bullishness as they explain in their daily note that "talk of seasonal oscillation in buyback activity is over-exaggerated."

Lot of talk around buyback blackout periods

 

Having briefly reached bull market status (ripping 20% off last week's lows), WTI crude oil is collapsing again this morning as the reality of excess supply and dwindling demand crash on the shores of manipulated futures and ETFs. However much hope was imbued into this rally as "setting the bottom" for oil, it seems the rally was used by 'investors' to hedge the downside as bets on a bearish plunge have soared to record highs.

Hope fades for a big stimulus package...

And reality hits oil with the chaos in financial markets remaining...

As regular readers are no doubt acutely aware, Alberta is in trouble.

The province is at the heart of Canada’s dying oil patch and crude’s inexorable decline has had a devastating economic impact.

30% of provincial revenue is derived from resources and as crude collapsed, so did oil and gas investment. O&G spending plunged by more than a third in 2015 and as provincial authorities wrote in their latest fiscal update, “weakness in the oil and gas sector has spread to other sectors of the economy.”