This chart illustrates how Walmart thrives when America is in pain

Walmart reveals all.

The world’s largest brick-and-mortar retailer on Wednesday said that profits in 2016 and 2017 would be hurt by a strong US dollar and increased investment in its employees.

Recall that back in February Walmart announced that it would raise pay for its hourly employees across the board.

Following Walmart’s warnings, Wall Street analysts said that this profit outlook is a sign of where the company is in its life-cycle. Walmart had to this point, in the eyes of analysts at Stifel, “over-earned” as it enjoyed the ability to charge the lowest prices, get the largest market share, and pay its employees low wages.

Working in the company’s favour, particularly in the wake of the financial crisis, was its edge as the lowest-cost retailer across a number of categories, as well as the country’s largest private employer during a period when the unemployment spiked north of 10%. And so its pricing-power over suppliers, consumers, and workers was all at a peak.

Now, the tides have turned in the economy and so have Walmart’s fortunes.

All of this may be a source of worry for investors in the broad stock market because if Walmart is near its bottom, then the rest of the stock market may be near its top.

The Financial Times’ John Authers first posted this chart on Wednesday, comparing the S&P 500’s performance to Walmart’s performance relative to the S&P 500. It gives you an idea of how well the market is doing as a whole, and then how well Walmart is doing relative to that.

As the Huffington Post’s Ben Walsh said, this chart shows Walmart as a, “steady proxy for future real corporate cash flows.”

Which basically means if Walmart is doing well, broader corporate America is probably doing poorly now but will do better in the future. And vice versa.

And so here we are: Walmart doing poorly.

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