What is Causing the Increase in Poor Stock Performance?

As we march ahead into the Holiday Season, with Black Friday and Cyber Monday now past, I sit back and ponder some thought.  Although Black Friday Sales are said to be down for most retailers, while showing an overall increase in sales for the entire weekend of about 9%, and some reports of 30% increases for Cyber Monday from retailers across the United States, What is causing poor stock performance?

Every month I track 29 stocks which consist of a wide variety of retailers and various product categories.  In addition, I also track Sweet Crude Oil to see if stocks are being directly affected by oil prices.  This week as I tracked the stocks, I was pleasantly surprised to see that of the 29 stocks, 24 had a decrease in stock value from last month.

Although I would have speculated with the perception that an increase in sales would add some reassurance for potential shareholders, I am surprised to see the opposite response in stock values.  As I looked at the value of oil per barrel, it has fallen $7 a barrel since October which should increase consumer confidence and loosen the grip of some hard earned dollars for goods and services.  In addition, as I look at oil prices, they are actually the lowest they have been since June.  While there still is some global turmoil, with little chance of needing American military intervention, that should have little affect on the immediate stock values as well.

As I narrow down what could be causing many of these stocks to deflate in value from last month, I have also concluded that upper executive management decisions or marketing changes are not the cause.

Since people are spending, unemployment is falling, and home sales are on a rise, the only other reason I can conclude for the stocks falling is due to future projections beginning in 2013.  Although it appears sales are going to power through the end of the year finishing retail numbers out stronger than 2011, with some uncertainty of the near future, stocks are not mirroring sales.  With a slew of new taxes to be imposed in January, with both personal and corporate pocketbooks to be affected, one can only conclude that this is the cause for the immediate stock value decreases.  In prior months, it is likely that people purchased stocks which drove the increase in stock value due to Presidential Election Projections, which likely is not the outcome they had wished for.

Despite the outcome of the election, I feel confident this is likely the cause for investor uncertainty and for the stock value decreases.  Since there is much instability for what impact these imposed taxes could have on the economy, I believe people are holding steady until things are presented more clearly.

So what is causing the increase in poor stock performance?  It is most likely the outcome of the election and investor uncertainty for what could begin in 2013.  Although it should be of no surprise, once people are impacted by the imposed taxes, it could have an affect on expendable income and consumer confidence, which directly relates to corporate spending on capital improvements and profit sharing.  With many unknowns for what 2013 holds, the safest investment option is holding onto and preserving what you have until a better educated decision is available.  Since we can narrow all of the other reasons for the stocks falling in value, this would be the best explanation I can conclude for its cause, and hope that the future flourishes with economic growth.