Inflation and Interest Rates - September PCE report showed inflation rose 28% year-over-year, the fastest pace since spring 2024 [1] - Tariffs impacted durable goods inflation, but overall inflation is expected to decrease from nearly 3% to around 2% next year [3][4] - The market anticipates the Fed will cut rates, but some dissenters suggest a more cautious approach [6] - Long-term yields are expected to remain around 4%, potentially rising to 45%, due to sticky inflation and supply issues [37] Economic Outlook - The US economy may experience a "code red affordability moment," particularly affecting lower-income individuals and young people [2][13] - Stimulus from tax cuts, the World Cup, and the US's 250th birthday could lead to a strong economic year [9] - Consumer spending remains strong, despite concerns about affordability [16][18] - AI is estimated to contribute about 25% to GDP growth, with AI-related capital expenditure representing approximately 15% of GDP [73][72] Market Dynamics - The market may broaden beyond the "Magnificent Seven" to focus on the "Impressive 493" stocks in the S&P 500, leveraging AI for productivity gains [21] - Bitcoin is primarily a trading vehicle influenced by technical factors rather than fundamentals, with stablecoins potentially replacing its transaction function [23][25] - The labor market shows signs of cooling, with increased layoff announcements and employers limiting headcount [89] - The Beige Book indicates cooler consumer spending and hiring, along with moderate price increases [87][91]

Consumer Behavior - Consumers are adapting to budget constraints by opting for smaller, more frequent purchases [1] - Consumers are reducing spending on non-essential discretionary items [1]

Core Viewpoint - Deckers Outdoor has faced significant challenges in 2025, resulting in a 53% decline in stock value year-to-date, raising questions about its ability to recover in 2026 [2][4]. Group 1: Macroeconomic Environment - The primary challenge for Deckers in 2025 has been weakening consumer spending in the U.S., impacting not only Deckers but also other consumer discretionary companies like Lululemon and Nike [5]. - Revenue growth slowed to 9% year-over-year in the fiscal second quarter, with domestic sales increasing only 1.7%, while international sales grew by 29.3%, now accounting for over 40% of total revenue [6]. Group 2: Performance in New Markets - Growth in international markets, particularly in China and the EMEA region, is crucial for Deckers' long-term growth strategy, with the company opening its first store in Germany [9]. - Hoka has shown strong performance in major European markets, gaining market share and experiencing growth in the direct-to-consumer channel [10]. Group 3: Margin Strength - Deckers has historically maintained high gross margins, which improved from 55.9% to 56.2% despite disappointing second-quarter results, indicating effective management of product pricing [11]. Group 4: Valuation - Following a decline of over 50% in 2025, Deckers' stock trades at a price-to-earnings ratio of 14, suggesting that significant weakness is already reflected in the stock price [13]. - If the valuation decreases further, it may present a buying opportunity for long-term investors, assuming the company can stabilize its business [14].

Economic Indicators - ADP's latest monthly jobs report indicates a loss of 32,000 jobs in the private sector for November, complicating the understanding of job market health due to a government shutdown affecting BLS reporting [1] - Traditional economic indicators present conflicting narratives; while GDP and consumer spending are up, employment estimates show job losses, raising questions about the economy's actual performance [2][4] - A revision of second-quarter GDP growth saw an increase to 3.8% from a previously reported 3.3%, marking a significant recovery from a -0.6% growth in the first quarter [3] Consumer Sentiment - A Fannie Mae survey revealed that 67% of consumers believe the economy is "on the wrong track," reflecting a growing pessimism about economic conditions [9] - Pew Research Center reported that 74% of U.S. adults view the economy as "fair/poor," with 42% attributing their negative outlook to rising prices and personal expenses [10][11] Spending Patterns - Research indicates that the top 10% of earners account for nearly 50% of all consumer spending, while the bottom 80% are only keeping pace with inflation, suggesting a potential vulnerability in consumer spending if high earners reduce their expenditures [8]

US consumer spending stalled in September, suggesting Americans were already stretched going into the government shutdown in the face of stubborn inflation https://t.co/vT1Icgrezx ...

Group 1 - Investors are currently analyzing retailers to identify potential beneficiaries of seasonal consumer spending trends [1] Group 2 - The focus is on U.S. and European equities, particularly undervalued growth stocks and high-quality dividend growers [2] - Sustained profitability, characterized by strong margins, stable and expanding free cash flow, and high returns on invested capital, is emphasized as a more reliable driver of returns than valuation alone [2] - The investment strategy aims to balance asset management to ensure financial freedom while maintaining the ability to work in fulfilling environments [2]

Macy’s handily beat Wall Street’s forecasts in the most recent quarter and raised its guidance for the rest of the fiscal year, showing that consumers are still spending despite their economic concerns https://t.co/d13mXsXEjD ...

Retail & Consumer Trends - The Thanksgiving weekend saw a record of nearly 203 million shoppers, up from 197 million last year, indicating strong consumer demand driven by promotional deals [3][4] - 54% of shoppers took advantage of early holiday sales, potentially impacting December sales due to front-loading [8] - Consumers have completed about 40% of their holiday shopping, leaving 53% of shopping for the holiday season [12] - Top purchased items include clothes, toys, and books, while gift cards are the most desired items [14] - American Eagle reported better-than-expected revenue with double-digit comparable sales increase and positive growth, raising its fourth-quarter operating income outlook [55][56] Economic Outlook & Market Analysis - The consumer is seen as sentimentally weak but fundamentally sound, with wages exceeding inflation for 30 straight months and low unemployment [16] - The US Dollar Index is being closely watched around its 50-day moving average, with potential implications for commodities, crypto, and stocks [24][27] - Bitcoin experienced a significant dip followed by a rebound, finding support around $85,000, but further washout is anticipated before a clear bullish trend [32] Charitable Giving & Tax Planning - New tax rules in 2026 will limit deductions for charitable giving to amounts exceeding 05%-1% of adjusted gross income [39] - Donor-advised funds are highlighted as a strategy to frontload giving and maximize tax deductions, especially beneficial for smaller donations [42][49] - Americans are generous, giving more than twice as much as a percentage of GDP compared to other countries [48] Technology & Software - Intel is up almost 85%, NXP up 8%, Texas Instruments up 4%, indicating the AI chip sector is still active [21][22] - GitLab's fourth-quarter sales forecast is weighing on the stock, despite adjusted earnings per share coming in at 25 cents versus estimates of 20 cents, and revenue beating analyst estimates coming in at $2444 million versus $2395 million estimated [57]

95% of Black Friday purchases were financed.Over 2/3 of the borrowing has a term of more than 30 days.Not a vote of confidence in the state of US consumers.Adam Cochran (adamscochran.eth) (@adamscochran):Breakdown of the Black Friday data tells us:-Consumer is weakening.-95% of sales volume was financed.-67% of that intends not to pay off within 30 days.-Roughly $1B was spent using BNPL models which are the worst debt.This points to a *really* unhealthy economy. ...

Cyber Monday 2025 just became the biggest online shopping day of all time in the United States as consumer spending jumped 7.1%. https://t.co/uKNUaMEqeE ...