XPost: alt.fan.rush-limbaugh, misc.consumers, sac.politics
XPost: talk.politics.guns
From: biden.screws.up@nytimes.com
On 25 Jan 2022, Bob Duncan posted some
news:sspvoo$lsig$60@news.freedyn.de:
> Biden fucked up everything.
As I have often told people who care to ask, the external environment
should be one's observation deck for possible investments.
To that end, I splurged on a $120 pair of low-top Nike dunks on July 4
weekend. What better way to show off how cool your aging 40-year-old-plus
self is in the office than by rocking a pair of sweet Nike dunks a day
after the manufacturer served up lackluster guidance and the stock sank?
Interestingly, the Foot Locker store where I got these pricey fountains of
youth was generally empty. The July Fourth weekend is usually a hotbed of
buying activity for things you don't really need but rather want. And
maybe it was in other states, just not at this particular store at this
particular moment in time.
What wasn't empty on July Fourth weekend? The two no-frills Marshalls
locations (owned and operated by TJX Companies) I popped into for some
silverware — one on Saturday and the other on Sunday. Both stores looked
as if angry bulls had run amok in the aisles — everything was that messy
and picked over. Cut in line at your own risk, the places were mobbed with
deal seekers.
These three holiday occurrences sent me back to reconnect on the state of
consumer stocks ahead of the pivotal back-to-school shopping season.
I was reminded how hated consumer names are right now, as seen in new Bank
of America data.
Consumer discretionary stocks are at the lowest exposure among hedge fund
managers and long-only managers in the history of Bank of America's data
set.
"Resilient consumption in the face of inflation pressures, a slackening
labor market, and a host of other factors is seen as unsustainable by most
portfolio managers," said BofA's top equity strategist Savita Subramanian.
Subramanian added, "faith in the consumer is waning."
Ouch.
The top 20 most-shorted S&P 500 stocks — as presented by BofA — are
dominated by companies deemed consumer discretionary.
The top five includes Dish Network (you definitely don't need expensive
Dish Network services); Ralph Lauren (don't need an $80 polo shirt from
Macy's); CarMax (you can live with your 100,000-mile road warrior a little
longer in a land of higher financing costs); Paramount (do you really need
Paramount+?); CH Robinson (a logistics play that ships stuff you probably
don't need).
This positioning reeks of investors banking on a second-half consumer
collapse.
But perhaps all of this negativity on the consumer shouldn't come as a
surprise.
The jobs market is slowing. Stories about AI taking jobs continue to
populate (here's what musician and tech investor will.i.am told us
recently on the topic). Headline-grabbing layoffs continue to rip through
the economy (see Disney's ESPN "talent" cuts).
Further, nagging inflation has eaten into the trillions of dollars in
pandemic savings.
The personal savings rate sits at 4.6%, down from double-digits at the
height of the pandemic and below the long-run average of 8.3%.
Can't spend much if your paycheck is barely making ends meet and your
savings account is as dried up as the Sahara.
Should you be using this juncture to go against the crowd and scoop up
retailers and other consumer-centric stocks? Beats me. I just buy Nike
dunks and do news — I don't pick stocks anymore.
I will say this though: It's hard to get too excited about many of these
names in front of potentially two more interest rate hikes, a down-
trending personal savings rate, and sticky inflation.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter
@BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations
or anything else? Email brian.sozzi@yahoofinance.com
https://finance.yahoo.com/news/investors-are-waiting-for-a-consumer-
collapse-morning-brief-100009895.html
--- SoupGate-Win32 v1.05
* Origin: you cannot sedate... all the things you hate (1:229/2)
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