Core Insights - Consumers have consistently predicted economic trends more accurately than experts, indicating a disconnect between traditional economic models and actual consumer behavior [2][5][47] - The upcoming PYMNTS Consumer Expectations Index (PCEI) aims to address the gaps in measuring consumer sentiment that traditional methods fail to capture [26][30] Consumer Behavior and Sentiment - Consumers have shown a tendency to prioritize essential expenses over discretionary spending, with 68% of American households living paycheck to paycheck [7][20] - Traditional sentiment measures do not account for the long-term impact of inflation, leading to a persistent feeling of financial stress among consumers despite macroeconomic indicators suggesting recovery [11][14] - The relationship between income and spending behavior has weakened, with many high-income earners also reporting living paycheck to paycheck due to fixed obligations and debt [17][18] Structural Gaps in Economic Measurement - The original methodology for measuring consumer sentiment is outdated, failing to capture the complexities of modern financial lives [10][48] - Three key blind spots identified include: 1. The permanent damage from inflation, which has not returned to pre-2021 levels [11][12] 2. The unreliable correlation between income and spending behavior due to varying financial structures [15][19] 3. The distinction between employment rates and job security, which affects consumer spending decisions [21][23] PYMNTS Consumer Expectations Index (PCEI) - The PCEI will launch in March 2026, designed to provide a more nuanced understanding of consumer sentiment by incorporating structural constraints such as debt manageability and savings capacity [27][30] - The index will measure consumer sentiment across 11 dimensions, aiming to reflect both feelings and the ability to act on those feelings [29][30] Recent Data Insights - February's PCEI data indicates cautious optimism among consumers, with a score of 51.5, but reveals significant disparities based on financial stability and generational differences [32][37] - Job security perceptions show a high score of 83.5, but confidence in finding comparable work drops to 48.0, highlighting a gap between perceived security and actual job market conditions [41][42] - Consumers are managing debt and maintaining employment but are doing so with caution, indicating a fragile financial foundation [46][48]

Key TakeawaysGerman Q4 GDP was finalized at 0.3% growth, with internal demand components like private consumption (0.5%) and capital investment (1.0%) significantly outperforming market estimates.Thai stocks surged 1.6% following a rate cut by the Bank of Thailand, as the central bank pledged to maintain an accommodative stance to support economic recovery.German GfK Consumer Confidence for March disappointed at -24.7, missing the consensus estimate of -23.0 and highlighting a growing rift between past grow ...

Pre-market futures are busy climbing out of the deep hole Monday’s market dug for itself, particularly on the blue-chip Dow index. Tariff concerns and possible military conflict with Iran are issues that have not gone away, but neither have they poisoned the well. The Dow is up +138 points, the S&P 500 is +11, the Nasdaq +113 and the small-cap Russell 2000 is +4 points at this hour. Q4 Earnings Roundup This Morning: HD, PLNT & MoreHome Depot (HD)  beat earnings estimates in its Q4 report out this morning by ...

Core Insights - The U.S. economy is experiencing conflicting signals with a sharp deceleration in growth and unexpectedly stubborn inflation, complicating the outlook for potential interest rate cuts later this year [1] Inflation Data - The Core Personal Consumption Expenditures (PCE) Price Index rose to 3.0% year-over-year, exceeding the 2.9% forecast and up from November's 2.8% [1] - The headline PCE index increased by 2.9% annually, surpassing both the previous month's data and forecast, with both core and headline prices rising by 0.4% monthly, marking the sharpest monthly growth since February [1] Economic Growth - Real GDP expanded at an annual rate of 1.4% in the fourth quarter of 2025, a significant decline from the 4.4% growth in the third quarter and only half of the 2.8% forecast [1] - The expansion was primarily driven by increases in consumer spending and business investment, but these gains were offset by declines in exports and government spending [1] Consumer Sentiment - The University of Michigan Consumer Sentiment Index rose to 56.6, reaching a six-month peak, although it fell short of the 57.3 forecast and remains historically low [1] - The "current conditions" subcomponent rose for the second month, while the "expectations" subcomponent fell for the first time in four months due to ongoing price pressures [1] - Near-term inflation expectations cooled to 3.4%, the lowest in over a year, while long-term expectations remained unchanged at 3.3% [1] Market Reactions - The S&P 500 posted a weekly gain of 1.1%, marking its first weekly gain since January, while the S&P Equal Weight Index rose by 0.6% [1] - The 10-year Treasury yield finished the week at 4.08%, and the 2-year note at 3.48% [1] - The CME FedWatch Tool indicates a 96% chance that the Federal Reserve will hold rates steady at their next meeting, with markets pricing in two 25 basis point cuts in 2026 [1]

Quick Read The personal savings rate collapsed from 6.2% to 4.2% over the past year. At 1.82% inflation $50K in annual retirement expenses will double to $102K over 25 years. Transfer receipts grew 9.3% year-over-year versus 4.1% wage income growth. A recent study identified one single habit that doubled Americans’ retirement savings and moved retirement from dream, to reality. Read more here. If you're in your mid-50s and haven't seriously confronted your retirement numbers, here's the uncomfor ...

Core Viewpoint - General Mills Inc. has lowered its fiscal 2026 sales outlook due to a challenging consumer environment, now expecting organic net sales to decline by 1.5% to 2% compared to the previous forecast of a decline of 1% to an increase of 1% [1] Group 1: Consumer Environment - The company attributes the decline to weak consumer sentiment, heightened uncertainty, and significant volatility affecting category growth and consumer purchasing patterns [1] - CEO Jeff Harmening noted that cereal, snacks, and dog food are experiencing the most significant impacts from the unstable consumer environment, driven by higher inflation, reductions in food aid benefits, and geopolitical uncertainty [2] Group 2: Financial Projections - Adjusted operating profit and adjusted diluted earnings per share are now expected to decrease by as much as 20% in constant currency, compared to the previous guidance of a decrease of up to 15% in constant currency [3] Group 3: Pricing Strategy - General Mills has lowered prices across approximately two-thirds of its North American retail business, which has resulted in an eight percentage point increase in volume where prices were reduced [4] - The company is also removing about 20% of its "least productive" products from the market [4] Group 4: Stock Performance - Following the announcement, the stock fell by 3.6% and has declined by 18% over the past year [5]

Economic Overview - Consumer sentiment in the U.S. improved to a six-month high of 57.3 in February, up from 56.4 in January, surpassing the consensus estimate of 55 [3][11] - Despite concerns over high prices and a tightening labor market, consumers remain optimistic about inflation easing in the near future [4][5] Consumer Discretionary Stocks - Recommended stocks include Carnival Corporation & plc (CCL), Dolby Laboratories, Inc. (DLB), Marriott International, Inc. (MAR), and Ralph Lauren Corporation (RL) due to positive earnings estimate revisions and strong Zacks rankings [2] - CCL, the largest cruise operator globally, has an expected earnings growth rate of 12.9% for the current year, with earnings estimates improving by 5.8% over the last 60 days [8][11] - DLB, which focuses on audio and imaging technologies, has an expected earnings growth rate of 0.9% for the current year, with estimates up by 1.9% in the past 60 days [10] - MAR, a leading hospitality company, anticipates earnings growth of 15.7%, with estimates increasing by 1% over the last 60 days [11] - RL, a designer and distributor of premium lifestyle products, expects a significant earnings growth rate of 30.5% for the next year, with estimates improving by 5.2% in the past 60 days [13]

Economic Outlook - The U.S. economy is estimated to have expanded at an annual rate of 3.7% in the fourth quarter, according to the Federal Reserve Bank of Atlanta [3] - Fed officials forecast a gross national product growth of 2.3% for this year, following a 1.7% gain in 2025 [3] Interest Rate Policy - Policymakers have reduced the main interest rate three times in the final months of 2025 to support the labor market, despite inflation remaining above the 2% target [4] - Cleveland Fed President Beth Hammack noted a brightening economic outlook, with encouraging growth readings and a stabilized labor market [4] Consumer Spending and Retail Sales - Economic activity has rebounded strongly, supported by robust consumer spending and business investment, with third quarter real GDP growth estimated at 4.4% [5] - Retail sales were unexpectedly flat in December, indicating a downbeat mood among consumers, with declines reported in several retail categories [5] - The pace of spending growth in the second half of 2025 appears unsustainable due to slowing growth in real incomes and weakness in the labor market [5]

Market Sentiment - The CNN Money Fear and Greed index showed an increase in overall market sentiment, moving to a reading of 45, indicating a shift to the "Neutral" zone from a prior reading of 34.2 [3] - Despite the increase in sentiment, the index remained in the "Fear" zone on Friday [1] Stock Market Performance - U.S. stocks settled higher on Friday, with the Dow Jones index gaining around 1,207 points, closing at 50,115.67, marking a new record high above the 50,000-point milestone [2] - The S&P 500 rose by 1.97% to 6,932.30, while the Nasdaq Composite increased by 2.18% to 23,031.21 during the session [2] Sector Performance - Most sectors on the S&P 500 closed positively, with industrials, energy, and information technology stocks recording the largest gains [2] - Conversely, consumer discretionary and communication services stocks closed lower, bucking the overall market trend [2] Economic Indicators - The University of Michigan's consumer sentiment index increased by 0.9 points to a reading of 57.3 in February, surpassing market estimates of 55 [1]

Market Performance - Stocks showed a substantial move back to the upside, with the Dow closing above 50,000 for the first time, reflecting a recovery after recent declines [1] - The Dow soared by 1,206.95 points (2.5%) to 50,115.67, the Nasdaq surged by 490.63 points (2.2%) to 23,031.21, and the S&P 500 jumped by 133.90 points (2.0%) to 6,932.30 [2] - For the week, the Dow increased by 2.5%, while the S&P 500 edged down by 0.1% and the Nasdaq slumped by 1.8% [2] Sector Performance - Airline stocks experienced a significant increase, with the NYSE Arca Airline Index rising by 7.1% to its best closing level in over three years [6] - Computer hardware and semiconductor stocks also moved sharply higher, with the NYSE Arca Computer Hardware Index and Philadelphia Semiconductor Index up by 6.8% and 5.7%, respectively [6] - Gold stocks saw a 5.5% spike in the NYSE Arca Gold Bugs Index, driven by a sharp increase in gold prices [7] Consumer Sentiment - The University of Michigan reported an unexpected improvement in U.S. consumer sentiment, with the index rising to 57.3 in February from 56.4 in January, surpassing expectations of a decline to 55.5 [4] - The increase in consumer sentiment was particularly notable among consumers with the largest stock portfolios [5] Company-Specific News - Amazon's shares dropped by 5.6% after reporting slightly weaker than expected fourth-quarter earnings and forecasting 2026 capital spending above analyst estimates [5]