Investor_NICK
Biotech & Technology Investor
Falling real wages and rising gas prices explain why retail stocks have been sold off indiscriminately. @EdwardConard notes real wages fell for the first time in three years as April CPI rose 3.8% year over year. With Minneapolis gas near $5 a gallon, every further 50-cent rise could mean about another 2% off retail stocks. The S&P 500 is not that dependent on consumer earnings. x.com x.comÂ
Amazon's weak retail growth has shaken the earlier buy case. Online-store sales rose just 2% year over year, and the retail numbers look so poor that it is no longer clear at what price the shares are a buy. x.com x.com x.comÂ
High gasoline prices threaten Walmart's guidance. Gasoline is $5, making the expectation of great guidance pointedly doubtful. x.comÂ
US consumer cyclicals and broad market breadth look set to gain as Q2 bank results refute the K-shaped consumer doom thesis. Card spending rose 9% to 12% at JPMorgan, Bank of America, Citi and Wells Fargo while credit quality improved: JPMorgan's card net charge-off rate fell to 3.34% from 3.47% and it cut full-year guidance, and Wells Fargo's credit-loss provision fell 9%. With rate tailwinds and falling gas, retail, transports, regional banks and equal-weight stocks signal a cyclical rotation. … Show more
Higher transport and input costs threaten US stock margins and demand. The PPI surprise shows the oil-cost pressure described in March playing out: headline rose 1.3% monthly versus 0.6% expected, and core 0.7% versus 0.3%. The March scenario put logistics costs at 3-6 weeks and consumer prices and weaker demand at 1-3 months; margins could shrink 100-300 basis points if costs cannot be passed on. The full scenario was not expected to play out. x.com x.comÂ
Oil at its highest since May and a market selloff that could pressure spending if it persists make Kohl's 50% one-month rally hard to justify. Shares rose another 8% today as the market sold off AI stocks. x.comÂ
Rising freight and oil costs threaten consumer staples margins, with plastic a significant input, while a weakening consumer adds trade-down risk. That makes chasing the recent bid for staples unattractive. x.comÂ
Walmart and Costco should gain as soaring diesel costs push consumers to trade down. Diesel is up 35% in 40 days and moves the trucks that stock every US shelf, and though America produces about as much oil as it uses, oil trades globally, so Europe's shortage hits US prices. Retailers must raise prices and lose volume or absorb costs and miss guidance. Discounters are big enough to absorb the shock and win trade-down shoppers; packaged food, staples and restaurants look best avoided. x.com … Show more
Rising gasoline prices are short-term bearish for Lululemon, e.l.f. Beauty, Celsius, Nike, Ulta Beauty, Target and Deckers. Consumers squeezed at the pump spend less on discretionary items, while businesses face higher freight and logistics costs that pressure margins. Long term, the weakness should offer a chance to accumulate great brands at cheaper prices. x.comÂ
Walmart is a great company at a terrible price, trading near 38 times forward earnings while growth slows. Revenue and EPS beat, yet US comparable sales growth slowed to 2.6%, the weakest in six years, and the stock fell. Even after another 10% drop, it is not worth buying. x.comÂ
Walmart's 41x P/E looks hard to justify when gas prices are going through the roof. x.comÂ
