Hua Er Jie Jian Wen·2025-11-01 05:56Core Viewpoint - Goldman Sachs issues a "red alert" regarding the health of American consumers, indicating that consumption weakness has spread from low-income groups to the middle class, with consumer confidence at its lowest level in decades [1][3] Group 1: Consumer Health and Spending Trends - The discussion around consumer health is shifting, with more companies reporting a slowdown in consumption that now affects middle-income groups, particularly consumers aged 25-35 [1][3] - Companies like Kraft Heinz have significantly lowered their annual sales guidance, expecting a decline of 3% to 3.5%, attributing this to inflationary pressures and cuts in food assistance [1][3] - The consumer discretionary sector has seen a substantial sell-off, with non-essential consumer goods underperforming the market by 500 basis points [1][7] Group 2: Impact on Specific Companies - Chipotle's stock plummeted 17% as it reported a decrease in spending frequency among lower-income customers, who are facing pressures from unemployment and stagnant wage growth [3] - Other companies like CAVA and SG also reported significant declines in stock prices, indicating a broader trend of reduced spending among middle-income consumers [3] - Even traditional defensive sectors are not immune, with companies like Mondelez International and Hershey's noting that economic uncertainty is leading consumers to tighten their spending [3] Group 3: Performance of High-End and Resilient Brands - Despite pressures on the middle class, some high-end brands and companies with scale are still performing well, as indicated by Visa's report of strong spending across various categories [7] - Starbucks reported positive growth in transaction volume, particularly in its university and campus business, suggesting resilience among certain consumer segments [7] - Brinker International's Chili's brand is experiencing sales growth across all income levels, with the fastest growth seen among households earning less than $60,000 [7]