Here's Why You Should Pay Close Attention to What Target and Walmart Are Saying About the Economy

Target (NYSE: TGT) and Walmart (NYSE: WMT) are two companies that most everyone knows. Both have been around for decades, have continued to expand, and have growing e-commerce businesses. They are also Dividend Aristocrats, which are S&P 500 components that have paid and raised their dividends for at least 25 consecutive years.

Given that 70% of U.S. gross domestic product comes from consumer spending, Target and Walmart provide an excellent barometer on inflation and a glimpse into the pulse of the economy. 

Yet in the three-day period between May 17 and market close on May 19, Target and Walmart lost over $125 billion in market capitalization combined as both companies reported worse-than-expected quarterly results and offered bleak guidance. For context, the largest fast-food chain in the world, McDonald's, has a market cap of $169 billion. So having $125 billion evaporate in three days from two reliable consumer staples stocks isn't chump change.

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Source Fool.com