Bubble Monitor

Traffic as a Gauge of Consumer Strength

Traffic as a Gauge of Consumer Strength

Investors should be struggling to decide whether the economy is entering a recession, consistent with the base case for McDonald’s 2023 business plan. However, judging by the market’s recent performance, it appears that investors are already celebrating a soft landing. But before drawing that conclusion, we need better insight into retail traffic trends which, at first blush, have been depressingly negative.

read more
Lockdowns Tipped the Balance of Power to Employees in Low-Cost Cities

Lockdowns Tipped the Balance of Power to Employees in Low-Cost Cities

Why has consumer spending held up so well during a period of huge and punishing inflation? As it turns out, the long-term impact of the covid lockdowns was most notable for the lowest income demo who saw their hourly wages increase the most relative to all other earners. While this momentum is slowing, this development continues to have important implications for inflation prospects and the start of the 4Q22 corporate earnings season.

read more
Did Investors Forget about December’s Bomb Cyclone?

Did Investors Forget about December’s Bomb Cyclone?

December’s preliminary retail sales release spooked investors who smell a recession. Normally, this would be a boost to stocks because of expectations that the Fed might start to adopt a more dovish stance. However, this represents the first time that investors have finally come to believe that Powell & company intend to keep interest rates inflated, even if hell freezes over. 

read more
Performance Food Group (PFG) Investor Presentation – January 2023

Performance Food Group (PFG) Investor Presentation – January 2023

For some time, the market has been held captive to the Fed’s interest rate hikes and prospects about future actions to fight runaway inflation. Further, the Fed has been telling us that labor costs represent the main inflation culprit. However, comments from a recent PFG investor presentation reveal that the real cause of labor inflation is not something that interest rate hikes can solve.

read more
Are We in an Earnings Recession?

Are We in an Earnings Recession?

Recessions are typically defined by macroeconomic metrics like GDP & unemployment, data that relates to consumers. However, little attention has been dedicated to analyzing whether we are in a corporate profit recession. Fortunately, Corporate America is in pretty good shape – at least through 3Q22.

read more
The Great E-Commerce Reset

The Great E-Commerce Reset

How should the market interpret FedEx’s recent report of declining volumes? While scary at first glance, it reveals a rebalancing mix of online and in-person retail sales. Overall retail sales are still outperforming pre-covid levels, revealing the good news that Americans are getting back to normal.

read more
This Week in Summary 12/16/2022

This Week in Summary 12/16/2022

Fed Chair Powell’s comments during his recent Q&A (after raising the Fed Funds target range rate by +50 bps to 4.25% to 4.5%) were quite sobering to anyone willing to listen.

read more
This Week in Summary 12/8/2022

This Week in Summary 12/8/2022

We are stuck in a waiting period as it is too soon to tell how much gas the consumer has left in the tank, how much downsizing is left for corporate America (hopefully none), and what lagging effects will come from very aggressive rate hikes in a supply-constrained economy.

read more
Become a Member
No Bull Economics
Restaurant Research

Email Sign-up

Digital Marketing Opportunities
Restaurant Research

A Restaurant Research LLC Company