Over 70% of the US economy is driven by consumer spending. With that in mind, one has to ask… “if retail sales are as great as the data has been claiming, why are retail stocks lagging by so much?”
Retailers lead stocks. They peaked out higher at the last market peak. And they fell harder during the subsequent decline.
What are they saying about stocks today?
Also… as Bill King recently noted, if jobs growth is so fantastic in the US, why are companies “uncertain” about consumer spending?
A Number of Companies Are Warning About High Consumer Uncertainty
Source: Bloomberg
Also… why is consumer spending on discretionary items and dining out imploding?
H/T Aurelija Augulyte
The reality?
The consumer is not strong. Consumer spending is weak and getting weaker. Stocks are pricing in economic perfection at a time that the US economy is rolling over into recession.
This is the thing Crashes are made of.
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Best Regards
Graham Summers
Chief Market Strategist
Phoenix Capital Research
via http://ift.tt/2aXG7oW Phoenix Capital Research