A Wal-Mart store in Stratford, Conn. © Paul Taggart, Bloomberg via Getty Images

Call it Wal-Mart-gate.

Bloomberg's publication of emails from the vice president of finance and logistics at Wal-Mart Stores (WMT) won't bring down a president, but they were certainly enough to rattle the stock market this past Friday.

And I think those comments continue to hang over stocks and explain a good part of the recent weakness and volatility. Especially since they were echoed in the company's fourth-quarter earnings results released today.

In fact, I think the issue raised by these emails is the single scariest thing hanging over the stock market.

Emails from Wal-Mart? Scarier than the Federal Reserve minutes casting doubt on the U.S. central bank's commitment to economic stimulus via bond buying? Scarier than the currency wars launched by Japan, which have now spread to the pound? Scarier than economic numbers that show the eurozone sinking into recession? Scarier than the bloated balance sheets of the Federal Reserve or the off-balance-sheet debt of China's banks?

Well, in the long run -- say the next year or two -- absolutely not. The issues that I've noted above are the ones that could sink national and global economies in that time frame.

But in the shorter term -- say the next few weeks or couple of months -- absolutely. Those emails are especially scary for U.S. stocks. Right now, with U.S. market indexes near five-year or all-time highs, markets could head one of two ways: into a consolidation that builds a base for a run higher, or into a correction that could take stocks down 7% to 10% in a replay of the spring and fall 2012 corrections.

Jim Jubak

Jim Jubak

Why could emails from Wal-Mart help decide which way the market goes in the short run? Because some very big short-term worries could all line up in the next few weeks. Wal-Mart's warning is part of that pattern. Let me explain.

The world from Wal-Mart

In case you've forgotten, here's the really explosive quote from the emails published by Bloomberg: February sales are a "total disaster."

The Wal-Mart vice president went on to say that this had been the worst start to a month he's seen in his seven years with the company.

The worry here -- and the reason that investors and traders took these comments as something more than just Wal-Mart-specific bad news -- is that the February crash in sales was an indicator of damage done to the U.S. economy by the end-of-the-year fiscal cliff chaos and the eventual deal on Jan. 1.

The payroll tax hike

That deal, you'll remember, included the expiration of a 2-percentage-point cut in FICA, the Social Security payroll tax. In order to stimulate the U.S. economy, Washington had cut the Social Security tax to 4.2% from 6.2%. That put extra money into the pockets of every taxpayer, but most emphatically into the pockets of lower-income families. After the deal, the worry was that ending this tax cut would lower spending by these families, and lower it immediately, since the end of the tax cut would result in a reduction in take-home pay, not next month or next quarter, but immediately.

Wal-Mart's bad sales in early February seemed to confirm the reality of these fears. (It didn't help either that, because of the chaos of the fiscal cliff crisis, the Internal Revenue Service had delayed processing of early tax returns. Many Wal-Mart shoppers file early and then use an early refund, or an early tax-refund check from a tax preparer, to make a major purchase or two in the early part of the year.)

The Wal-Mart emails hit the stock market at an especially sensitive time, too. At that point, investors and traders were becoming convinced that the dreaded sequester budget cuts, put into place as part of the debt-ceiling deal in 2011, would kick in and inflict massive blunt-force trauma on government spending. The sequester would impose $1.2 trillion in spending cuts over the next 10 years on everything from the military budget (half of the cuts) to Head Start to low-income housing assistance to emergency preparedness. The Congressional Budget Office has estimated that the sequester would result in the loss of 750,000 jobs in 2013 alone.

And, unless the president and Congress can strike a deal, the sequester cuts start on March 1.

GDP gloom

At about that same time, on Feb. 28, investors and traders will also get the second estimate on U.S. gross domestic product for the fourth quarter of 2012. The first estimate, released in January, was disappointing. The U.S. economy actually contracted in the quarter, shrinking 0.1%. Economists had expected weak but positive growth of 1% or so.

GDP growth is often revised upward from the first to second estimate, and, from what I can gather, there's a sizable group on Wall Street that expects that kind of trend reversal on Feb. 28. That would be reassuring, since it would remove some worry that political chaos in Washington might be enough to tip the economy back into recession.

But data that have come out since the first estimate suggest that we might not get a positive revision this time. Actual inventory figures, for example, showing a less-than-estimated drop in inventories, point to the possibility that the first estimate of GDP was actually too high.

Do I need to say that a second estimate showing the GDP shrinking by more than 0.1% in the fourth quarter would reinforce fears that the fiscal cliff and the sequester chaos had inflicted significant damage on the economy?

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