Cause for Economic Optimism This Memorial Day Weekend

There's cause for both some economic optimism & future concerns, as Burt P. Flickinger, III discussed a special, worldwide Memorial Day broadcast edition of Bloomberg Daybreak with John Tucker, given a record number of weddings this weekend and AAA reporting more than 39 million traveling. Cautious, conservative common-sense consumers are cutting back on big-ticket items but spending on affordable luxuries: gifts for family and friends, and spending for what they need rather than impulse purchases.

The Bloomberg Terminal shows sectors & stocks with top-rated momentum in Agriculture & Energy, with Apparel at the “bottom of the basement” & more people spending on experiences like parties. However, for the first time in 14 years, there are no “safe harbors” in retail anymore, with food, big box, and category-dominant retailers (Apparel, Pet, Home, Sporting Goods, etc.) facing challenges. In Luxury, Nordstrom is doing okay, while Hermes stock is down significantly, and H&M Fast Casual is being pounded. Amazon will do much better with its “hard rudder right turn” into Fashion than it is doing with Food, thanks to higher profit margins & significant consumer demand as it opens its first physical clothing store in Los Angeles with model & stylist Heidi Klum.

Also: We are going through the denouement of the Retail Ice Age, where America evolved from 400% overstored a decade ago to 140% overstored going into Covid and will be about 115% overstored by next year as we go through a modest recession.

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