Core Insights - The earnings season provides insights into consumer sentiment and broader economic issues, particularly in the context of rising inflation and tariffs in 2025 [1][2] Group 1: Company Performance - McDonald's reported a 6% year-over-year increase in global systemwide sales, indicating strong consumer sentiment towards affordable dining options [5] - Shopify's revenue grew by 31% year-over-year, reflecting optimism in retail and a sustained shift towards e-commerce [8] - DoorDash experienced better-than-expected earnings and revenue, with U.S. marketplace orders increasing, suggesting strong consumer interest despite higher delivery costs [11][12] Group 2: Consumer Sentiment - Consumer sentiment appears resilient as evidenced by the performance of major brands like McDonald's, Shopify, and DoorDash, which all reported significant earnings wins [4][8][11] - McDonald's menu innovation and digital ordering initiatives are resonating with customers, potentially leading to stronger traffic and sales growth if household confidence improves [6] - DoorDash's success indicates that convenience remains a key driver of consumer behavior, even amid cost pressures [12] Group 3: Cautionary Signals - Despite positive earnings, McDonald's saw a decline in visits from low-income consumers, raising concerns about future performance as inflation pressures may lead to price increases [14][15] - Shopify's revenue growth was primarily driven by its European business and new large-scale merchants, rather than increased customer spending, suggesting a need for cautious interpretation of results [16] - The retail industry may face challenges due to new tariffs and disappointing inflation results, which could impact consumer discretionary spending [17]

Economic Indicators - Fresh data on inflation and consumer sentiment is expected [1] Earnings Reports - Earnings reports are coming from Cisco, CoreWeave, and Circle Internet Group [1]

Summary of US Consumer Tracker (2Q25) Industry Overview - **Industry**: US Consumer Sector - **Key Focus**: Impact of inflation, consumer sentiment, and tariffs on spending behavior Core Insights 1. **Inflation and Consumer Income**: - Inflation has increased, with a notable rise to 2.7% in June 2025, while real disposable income has declined sequentially in May 2025 [3][15] - Tariff-driven inflation is expected to further impact consumer prices in the second half of 2025 [2] 2. **Consumer Sentiment**: - Consumer sentiment showed slight recovery in June but remains significantly lower year-to-date in 2025, particularly among high-income consumers concerned about inflation and employment [3][17] - The trade-down effect is evident as consumers shift to lower-priced options due to economic pressures [3][17] 3. **Retail Sales Trends**: - Retail sales growth has normalized after an earlier pull forward, indicating stable shopping behaviors despite economic challenges [3][21] - Categories such as home goods and toys have turned inflationary in Q2 2025, contributing to a weak consumer backdrop [3][87] 4. **Sector Performance**: - **Broadlines & Hardlines Retail**: Companies like Dollar General (DG), Dollar Tree (DLTR), and Walmart (WMT) are expected to benefit from trade-down trends, with WMT well-positioned due to its enhanced shopping experience [4] - **Specialty Retail**: Anticipated price increases of high single digits to low double digits for apparel and footwear, and over 20% for hard goods due to tariffs, may impact Q3 spending [5] - **Restaurants**: A macro deceleration in May affected spending, with potential declines in 2026 due to SNAP benefit reductions [6] - **Alcohol Sector**: Consumption is pressured by affordability concerns, particularly among low-income consumers [7] 5. **Investment Ratings**: - **Retailing**: Outperform ratings for WMT, COST, DG, and LOW; Market-Perform for HD and DLTR; Underperform for TGT [11] - **Food Sector**: Outperform ratings for MKC, MDLZ, SMPL, and CPB; Market-Perform for several others [11] - **Apparel & Specialty Retail**: Outperform ratings for brands like NKE, TJX, and LULU; Market-Perform for CPRI and ROST [11] Additional Insights 1. **Consumer Behavior**: - The gap between low-income and high-income consumer sentiment has narrowed, indicating a shift in spending patterns [13][17] - Cooking from scratch is increasing as consumers seek value amid rising prices [7] 2. **Economic Indicators**: - The unemployment rate remains low, but consumer credit growth has decelerated in a high-rate environment [13][51] - The 10-Year Treasury yield remains elevated, reflecting higher inflation expectations [46][48] 3. **Inflation Dynamics**: - Cumulative inflation since January 2019 is at 28%, with food and energy leading the increases [94][96] - General merchandise categories have recently turned inflationary, influenced by tariff-driven price increases [83] This summary encapsulates the key findings and implications from the US Consumer Tracker for Q2 2025, highlighting the challenges and opportunities within the consumer sector amidst ongoing economic pressures.

The shares of LVMH, Louis Vuitton's parent company, are down 15% since the start of 2025. Getty Images The luxury industry is on the verge of a necessary reset. LVMH's profits dropped 15% in the first half of 2025, with organic growth down 3%, and nearly all divisions reported flat or negative performance. As for Gucci-owned luxury group Kering, this year has been even worse: revenue is down 18% for Q2 with Gucci's sales plummeting by 25% and overall sales in Asia and Japan down as much as 29% in the first ...

Consumer Sentiment - British households are more inclined to save money than at any point since the run-up to the global financial crisis [1] Economic Outlook - Cautious consumer sentiment reflects potential economic uncertainty [1]

Core Viewpoint - Chipotle Mexican Grill Inc experienced a significant decline in share price following a revenue miss for the second quarter, with analysts providing mixed assessments on the company's performance and future outlook [1][9]. Group 1: Financial Performance - The company reported a 4% decline in same-store sales, missing expectations by 112 basis points [2]. - Earnings per share were reported at 33 cents, aligning with expectations, while store-level margins were better than anticipated [4][8]. - Despite the same-store sales contraction, trends improved in June and July, with two-year comps bouncing back to around 8% [3][5]. Group 2: Management Guidance - Management lowered the full-year same-store sales guidance to approximately flat from low single digits due to macroeconomic uncertainties [3][6]. - Analysts noted that while there were positive trends in late June and July, the overall commentary remained cautious, balancing optimism with guidance reductions [7]. Group 3: Analyst Ratings and Price Targets - RBC Capital Markets reduced its price target from $65 to $58 while maintaining an Outperform rating [10]. - KeyBanc Capital Markets also cut its price target from $60 to $58 but kept an Overweight rating [10]. - BMO Capital Markets reiterated an Outperform rating with a price target of $65, indicating some optimism for future performance [10].

Economic Outlook - U.S. consumer sentiment reached a five-month high in July, with the Consumer Sentiment Index increasing to 61.8 from 60.7 in June, indicating growing optimism about the economy [3] - Rising consumer sentiment is expected to positively influence household spending, particularly benefiting the consumer discretionary sector [1][3] Inflation Expectations - A significant factor contributing to improved consumer sentiment is the decline in inflation expectations, with consumers now anticipating a 4.4% price increase over the next year, down from 5% in June, marking the lowest short-term inflation outlook since February [4] - Long-term inflation expectations also decreased to 3.6%, the lowest in five months [4] Consumer Caution - Despite the positive sentiment, consumers remain cautious regarding business conditions, labor markets, and personal income prospects compared to the previous year [5] - The recent increase in sentiment suggests that consumers believe the risk of worst-case scenarios has diminished [5] Investment Opportunities in ETFs - Investors can capitalize on the positive consumer sentiment trend through consumer discretionary ETFs, including: - **Consumer Discretionary Select Sector SPDR Fund (XLY)**: Holds 51 securities with significant allocations in hotels, restaurants, leisure, and retail, boasting an AUM of $22.3 billion and an expense ratio of 0.08% [2][5] - **Vanguard Consumer Discretionary ETF (VCR)**: Comprises 296 stocks, primarily in broadline retail and automobiles, with an asset base of $6 billion and low fees of 9 bps [2][6] - **Invesco Dorsey Wright Consumer Cyclicals Momentum ETF (PEZ)**: Focuses on 37 stocks showing momentum, with an asset base of $30.6 million and annual fees of 60 bps [2][7] - **VanEck Vectors Retail ETF (RTH)**: Tracks the performance of 26 large retail firms, with an asset base of $244.1 million and annual fees of 35 bps [2][8]

Forbes Daily: Consumer Sentiment And Spending Defied Expectations In June https://t.co/IE1zVSWOLv ...

Forbes Daily: Consumer Sentiment And Spending Defied Expectations In Junehttps://t.co/hVDFbXfBaS https://t.co/TKO3DZ4chl ...

Market Overview - Pre-market futures show positive movement with the Dow up +0.12%, S&P 500 +0.09%, Nasdaq +0.16%, and Russell 2000 leading at +0.52% [1] Bond Market - Bond yields remain stable with the 10-year yield at +4.44%, a slight increase of 3 basis points from last Friday, while the 2-year yield is at +3.88% and the 30-year yield at +5.00% [2] Housing Market - Housing Starts for June are reported at 1.32 million, slightly above projections, but still historically low compared to multi-year highs of 500K more in April 2022 [3] - Building Permits increased to 1.397 million from 1.394 million in May, but remain low compared to nearly 2 million in January 2022, prior to interest rate hikes [4] Company Earnings - 3M reported Q2 earnings of $2.16 per share, exceeding expectations of $2.01, with revenues of $6.2 billion, raising full-year 2025 earnings guidance to $7.75-8.00 per share [5] - American Express surpassed Q2 expectations with earnings of $4.08 per share and revenues of $17.9 billion, reflecting a year-over-year growth of +9% [6] - Charles Schwab's Q2 report showed earnings of $1.14 per share and revenues of $5.85 billion, both exceeding consensus estimates, with shares up +5% in pre-market trading [7] Economic Indicators - A preliminary print on Consumer Sentiment for July is expected to improve to 61.8 from 60.7, aligning with a healthier economic outlook as fears of tariffs impacting the economy have lessened [8]