You may have noticed gas prices have been moving higher. In fact, according to the Lundberg survey, gas prices, gasoline is up nearly $0.12 per gallon over the past two weeks, averaging $3.41 nationwide. That's still $0.38 lower than last year, but the recent price climb is being blamed in part on uncertainty in energy exporting countries like South Sudan, Ukraine, and Venezuela.
Will higher gas prices translate to less spending in stores?
"A long time ago, the rule of thumb used to be that a penny at the pump cost $1 billion of retail spending," says CNBC contributor Gina Sanchez, founder of Chantico Global. "That number's probably greatly increased by now since that was about 20 years ago."
Money spent on gasoline isn't going towards discretionary spending, according to Sanchez. She believes that high energy costs and bad weather played a role in Wal-Mart's lower guidance. "It's not the sort of consumption you could buy back in the spring," says Sanchez on energy spending. "That actually takes out of consumers' pockets and it's extremely worrying."
CNBC contributor Andrew Busch, editor and publisher of The Busch Update, says gas prices and retail stocks should be expected to move together.
(Read: US crude extends rally on supply, demand expectations)
Charting the Reformulated Gasoline Blendstock for Oxygen Blending (RBOB) contract versus the SPDR S&P Retail ETF (the XRT) over five years, Busch notes the two had three major divergences. The first two times – once early 2011 and again in early 2012 – gasoline prices moved higher than the XRT only to snap back. Recently, however, it's the XRT that has moved higher than gasoline.
"That's reflective of not only an improving economy but, of course, all the gas and gasoline and oil that we're producing here in the United States," says Busch. "Overall, I don't think [higher gas prices are] really going to detract a whole lot from the economy and from consumer spending overall."
To see the rest of the discussion on the effects of higher gasoline prices on retail stocks with Sanchez on the fundamentals and Busch on the technicals, watch the video above.
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