This week’s posts tell a story about the struggles of middle-income consumers which contrasts with the free spending of wealthier consumers with a travel bug. The question for the markets is whether spending support from higher-income consumers can outweigh the malaise of middle America and judging by the performance over the last week, the jury is still out.
Investors thrilled about the prospect of a soft landing and an eventual cessation of rate hikes pushed stocks through the roof so far through the summer of 2023. Imagine what these bullish results would have looked like if bank stocks had not been roiled by such aggressive rate hikes.
- Is it possible that AI trading algorithms pushed the AI related stocks (semiconductors, software & Meta) into the stratosphere? Is there a conflict of interest?
- Notably, a rebound in the travel bug this summer helped boost the cruise, hotel and airline stocks (Delta 2Q23).