Consumer Sentiment vs Reality - Consumer sentiment has been unreliable in predicting the economy's direction [1] - Consumers are good at judging their own finances, but pessimistic about the overall economy due to media influence [2][3] - Consumer sentiment is often influenced by political affiliation [4] - It's more reliable to observe consumer spending habits than to rely on sentiment surveys [6][7] Consumer Spending and Economic Resilience - Household consumption has been steadily increasing [7] - Big banks' earnings reports show no significant cracks in the US consumer [9] - Charge-offs at big banks were below expectations, indicating no consumer credit stress [10] - The job market is the primary driver of consumer spending [10] - The labor market is cooling, but still adding jobs at a reasonable pace [11][12] - As long as real wage growth is positive, consumption will continue to be supported [13] Inflation and Tariffs - The year-over-year CPI number of 27% is driven by a low base period in the previous year [14] - Month-over-month CPI numbers are within or below expectations [15] - Economists are finding evidence that tariffs are pushing prices up, especially in product categories dominated by imports [18][19] - Trump's tariffs might raise inflation from 27% to 35%-4% [21] - Inflation had fallen to a low of 23% earlier in the year, but is now trending in the wrong direction [24]

Market Performance - NASDAQ is the only major market to close in the green [1] - Dow is down almost 1 percentage point [2] - S&P 500 is down about 04 percentage point [3] - S&P 600, a small cap market, is down 21%, marking the worst day for small caps in almost 8 weeks [4] - Tech is the only sector in the green, with Materials down 2% [6][7] Economic Indicators and Analysis - The 30-year yield is back above 5%, impacting equities [4] - CPI inflation is stalling out, with tariffs affecting goods inflation [10] - Consumer sentiment is delivering false alarms, with consumers judging their own finances positively but the overall economy negatively [35] - Economists suggest focusing on consumer spending rather than sentiment [40] - June CPI report shows a year-over-year number of 27%, but month-over-month numbers are fine, with the core number at 02% [47][48] Company Specific News - Nvidia is up 404%, resuming sales of some chips in China, potentially adding $8 billion in revenue [8][18][19] - JP Morgan's earnings were strong, with net interest income guidance exceeding expectations by at least $15 billion and investment banking revenues up over 9% year-on-year [25][26][27] - Bank of America expects net interest income to rise about 7% from the previous quarter [62]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Consumer sentiment toward the economy and household finances has stabilized amid ongoing tariff concerns, with inflation remaining the primary concern for consumers [1][7] - The report indicates a slight decline in consumer confidence regarding the economic outlook, with 37% expecting improvement and 47% anticipating deterioration, resulting in a NET score of -10% [7][61] - Concerns over tariffs remain elevated but stable, with 39% of consumers very concerned, down from 43% in April [7][14] - The spending outlook remains stable, with 32% of consumers planning to spend more in the next month, yielding a NET of +15% [19][84] - Travel intentions are strong, with approximately 60% of consumers planning to travel in the next six months, reflecting optimism in leisure travel [117] Consumer Sentiment - Inflation is the top concern for consumers at 57%, down from 59% last month, while political concerns have risen to 43% [8][37] - Geopolitical conflict concerns increased to 31% this month from 21% last month [7][8] - Low-income consumers are more worried about paying rent/mortgage and debts, while upper-income consumers focus on investment concerns [9][42] Macro Outlook - Consumer confidence in the U.S. economy is slightly down, with 37% expecting improvement and 47% expecting deterioration, leading to a NET score of -10% [61][71] - The outlook for household finances remains positive, with 43% expecting improvement and a NET score of +16% [64][70] Tariff Impact - 39% of consumers report being very concerned about tariffs, with 33% planning to cut back on spending in response [14][19] - The level of concern about tariffs varies significantly by political affiliation, with 63% of liberals very concerned compared to 23% of conservatives [14][50] Spending Intentions - The short-term spending outlook is stable, with 32% of consumers expecting to spend more next month, yielding a NET of +15% [84][88] - 30% of consumers reported making a major purchase in the past three months, with 58% planning a major purchase in the next three months [97][98] Travel Intentions - Approximately 60% of consumers plan to travel in the next six months, with visiting friends and family being the most common reason [117][119]

Oil prices spiking following Israel's strike on Iran, adding an inflationary input ahead of the Fed's meeting next week. Meanwhile, we just got a positive signal from the data. An early read on Michigan consumer sentiment for June coming in well above expectations.Also, inflation expectations fell. Joining us is former Dallas Fed President and CNBC contributor Richard Fiser. So Richard, is is it your view that this is just going to make the Fed even more patient on its stance to do anything because it has t ...

U.S. stock futures drop and oil futures jump after Israel's attack on Iran, Adobe posts better-than-expected results and lifts its outlook, and analysts expect consumer sentiment to have improved. Here's what investors need to know today. https://t.co/OvmVdWQHKg ...

The results of the CNBC NRF retail monitor for May just released. Let's get to Steve Leeman. He has more on this.Hi, Steve. Hey, Becky. Consumer spending growth slowed in May.Apparent payback from strong April outlays that were propelled by consumers pulling forward purchases ahead of tariffs. And consumers of course could now face new challenges after developments overnight in the Middle East. Uh the CNBC NRF retail monitor.It's powered by real credit card spending data from Affinity Solutions showed a 0.5 ...

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies covered [19]. Core Insights - China's inflation is expected to soften, with May CPI reported at -0.2% due to weaker food prices and intensified price competition ahead of the shopping festival [8][10]. - Australia’s business sentiment has likely softened in May, reflecting broader economic challenges, particularly in profitability and new orders [8]. - India's CPI is projected to slow year-over-year but rise sequentially due to higher food prices [3]. - Japan's GDP growth has been revised to -0.8% QoQ SAAR, indicating economic contraction [4]. Summary by Relevant Sections Australia - Business confidence declined in May, with a reported score of -1, indicating broad-based weakness in the business environment [10]. - Consumer sentiment improved slightly in June, attributed to a second rate cut, while views on future conditions remain a focus [8]. China - CPI for May decreased to -0.2%, while PPI fell to -3.3%, reflecting weaker industrial demand amid tariff shocks [8][10]. - Exports are expected to slow to 4% YoY, with imports remaining soft at 0% YoY due to sluggish domestic demand [8]. India - CPI for May is reported at 3.0%, indicating a slight decrease from the previous month [10]. Japan - The second preliminary GDP report shows a slight downward revision in real capital expenditure, while public investment has been revised upward [4].

Core Insights - General Mills is facing significant challenges in the current consumer environment, with consumer sentiment at a low point, comparable to the period immediately following the pandemic in 2020 [5][6]. Company Overview - The company is heavily reliant on the U.S. market, with 85% of its business operations based there [6]. - Consumer financial stress is evident, as U.S. consumer debt has increased, indicating that while consumers are still making purchases, they are financially stretched [6]. Industry Context - The overall consumer sentiment in the U.S. is reported to be the second lowest in history, as per the University of Michigan's polling data [6].

Investment Rating - The report does not explicitly state an investment rating for the industry or companies discussed Core Insights - China's economy appears stable with a focus on boosting demand and improving consumer sentiment, despite challenges in the property market [1][4] - The property market remains fragile but stable, with government policies aimed at stimulating demand rather than supply [5][10] - Exporters are shifting production to Southeast Asia and Mexico due to high costs in the US, leading to potential price increases for Chinese products [1][5] - Industrial technology is advancing, with Chinese companies catching up to Western suppliers in automation and AI [1][28] - Datacenter construction is expected to significantly increase in 2025 due to AI adoption, with a potential doubling in compute buildout [1][6] Summary by Sections Economic Overview - The macroeconomic environment in China is stable, with minimal panic regarding tariffs and a notable focus on demand-side stimulus [4][8] - Consumer sentiment is increasingly important, with government efforts to boost consumption following trade negotiations [4][10] Property Market - The property market is stabilized by demand-side policies, but improvement is fading, and the government is focused on fixing this part of the economy [5][11] - Transaction volumes in the secondary housing market are performing better than new housing, with a notable divergence between luxury and ordinary homes [7][10] Export and Production Shifts - Exporters are moving production to existing hubs in Southeast Asia and Mexico, avoiding the US due to high costs [5][18] - Chinese appliance companies are successfully penetrating overseas markets, particularly in the EU and North America [13][19] Industrial Technology - The discrete automation market is showing signs of recovery, with Chinese companies developing competitive technologies in software and AI [28][39] - Shenzhen Inovance is gaining market share in industrial automation, focusing on customized solutions and responsiveness to customer demands [30][32] Datacenter and AI Adoption - AI adoption is accelerating, with significant investments expected in datacenter infrastructure by 2025 [6][39] - Companies are taking a pragmatic approach to AI integration, looking for validated use cases before large-scale implementation [6][39] Company-Specific Insights - Midea's domestic sales are expected to see single-digit growth, driven by a replacement cycle rather than new demand [13][21] - Haier is experiencing growth in overseas markets, particularly in Southeast Asia, while maintaining a focus on the US and EU [19][24] - Hisense is benefiting from subsidy policies, leading to revenue growth in both domestic and international markets [24][25]

Market Overview - Volatility has returned to Wall Street, driven by tariff fears and high inflation impacting consumer sentiment [1][2] - Consumer sentiment index dropped to 50.8 in May, a 2.7% decline from April, marking one of the lowest points in 75 years [5] - Since January, consumer sentiment has decreased by nearly 30%, with short-term inflation expectations rising to 7.3% in May from 6.5% [6] Federal Reserve and Inflation - The Federal Reserve is unlikely to implement interest rate cuts in the near term, maintaining a cautious stance despite signs of easing inflation [8] - The consumer price index rose by only 0.2% in April, with a year-over-year increase of 2.3%, the smallest since February 2021 [7] Tariff Impact - President Trump's announcement of sweeping tariffs raised concerns about a potential global trade war, leading to market sell-offs [9][11] - A recent 90-day trade truce with China has temporarily calmed the situation, delaying additional tariffs [10] Investment Opportunities - Recommended focus on safe-haven stocks, particularly low-beta consumer staples with high dividend yields [3][4] - Philip Morris International Inc. (PM) has an expected earnings growth rate of 13.7% for the current year and a dividend yield of 3.09% [14] - Nomad Foods Limited (NOMD) has an expected earnings growth rate of 7.3% and a dividend yield of 3.80% [16] - Zevia PBC (ZVIA) shows a significant expected earnings growth rate of 38.7% for the current year [17]