Consumer Confidence and Spending Trends - December consumer confidence data shows the fifth consecutive month of declines, reaching the lowest level since April [1] - Despite declining confidence, overall consumer spending is reported to be 4% higher than last year, indicating resilience among consumers [1] Holiday Spending Insights - The National Retail Federation (NRF) projects holiday spending to exceed one trillion dollars for the first time, highlighting a significant milestone [3] - Retail traffic in shopping centers remains strong, with full parking lots and active customer engagement observed [3] Retailer Strategies and Consumer Behavior - Retailers are discounting products to align with consumer expectations, leading to increased shopping activity [4] - Consumers are showing a preference for aspirational brands, purchasing items that may typically be above their price point but are available at value prices [6] Brand Performance - Notable brands such as Ralph Lauren, Gap, Kate Spade, Michael Kors, Coach, and Tory Burch are performing well in the current market [6]

Economic Overview - The recent GDP report indicated the highest quarterly gain annualized in two years, driven primarily by strong personal consumption, suggesting robust consumer spending [1][2] - The stability in the bond market, particularly the 10-year Treasury yield remaining between 4% and 4.2%, has provided support for the equity market [5][7] Federal Reserve Outlook - The strong economic data does not significantly alter the Federal Reserve's near-term outlook, with a slight decline in the odds of a rate cut in January, allowing the Fed to maintain a patient approach [4][6] - A steeper yield curve is viewed positively as it indicates a healthy and growing economy, despite concerns about inflation and increasing supply [8][9] Credit Market Insights - Credit spreads are currently low due to strong fundamentals across the credit spectrum, although risks remain in the lower-rated segments, particularly triple C rated bonds [12][14] - Corporate profits reached a new all-time high of over $4 trillion on a pre-tax basis, reflecting strong corporate fundamentals that justify the tight credit spreads [15][16] Equity Market Implications - The stability in bond yields is seen as beneficial for equity markets, contributing to a wealth effect and supporting capital availability [10][11] - Earnings growth has exceeded expectations and is anticipated to continue into 2026, which may positively influence stock market performance [12]

Group 1: Consumer Shopping Trends - A record 158.9 million consumers are expected to have shopped on "Super Saturday," reflecting a 1.1% increase from 157.2 million last year and surpassing the previous record of 158.5 million in 2022 [1] - Despite economic challenges, the late-season shopping surge is anticipated to help retailers close the final quarter stronger, supporting earnings growth and ETFs linked to consumer staples and retail benchmarks [2] - Consumers are shifting towards quality and meaningful gifts rather than just seeking discounts, indicating a "tactical consumer" approach amid a "two-speed" economy [4] Group 2: Retail Sales Outlook - Holiday spending is projected to exceed $1 trillion, but growth will primarily be driven by higher prices rather than increased consumer spending, with S&P Global Ratings forecasting a 4% growth in U.S. holiday sales for 2025 [5] - Analysts expect modestly positive retail sales in 2026, influenced by tariff-related inflation and some growth in consumer staples, despite weak discretionary spending [8] Group 3: ETFs Benefiting from Trends - ETFs focusing on consumer staples and those with robust omnichannel networks, such as Walmart and Amazon, are expected to benefit from the current shopping trends and sustained holiday demand [9][10] - Specific ETFs highlighted include: - VanEck Retail ETF (RTH) with assets of $248 million, top holdings in AMZN (19.53%), WMT (11.79%), and COST (8.06%), and an 11.6% year-to-date increase [11] - ProShares Online Retail ETF (ONLN) with an average market cap of $179.17 billion, top holdings in AMZN (23.35%), BABA (11.44%), and EBAY (8.11%), and a 31.9% year-to-date surge [12] - Global X E-commerce ETF (EBIZ) with net assets of $51 million, top holdings in Expedia (6.10%), SHOP (5.57%), and BABA (4.87%), and a 19.4% year-to-date increase [13] - Fidelity MSCI Consumer Staples Index ETF (FSTA) with net assets of $1.33 billion, top holdings in WMT (14.48%), COST (11.96%), and Procter and Gamble (10.05%), and a 2.4% year-to-date gain [14]

Core Insights - Klarna reports significant increases in U.S. holiday spending, with triple-digit year-over-year growth in categories such as entertainment (+130%), experiences (+115%), and automotive products (100%) from December 1 to December 22, indicating a shift towards experiential and high-value purchases this season [1][2] Consumer Trends - In traditional retail, footwear emerged as the most-clicked category, with popular items including Nike Air Force 1 '07, UGG Lowmel, Adidas Samba OG, and classic Jordan styles [3] - Headphones ranked as the second most-clicked category, with strong interest in Apple AirPods 4, AirPods Pro (2nd Gen), and premium models from Sony and Bose [4] - Gaming interest focused on console upgrades, particularly Microsoft's Xbox Series X and Series S, along with newer systems like the Nex Playground Game System [4] - Handbags saw steady engagement, with consumers favoring practical styles from brands like Michael Kors, Coach, Lululemon, and Marc Jacobs [5] - Fragrances dominated clicks, with bestsellers including Carolina Herrera Good Girl, Dior Sauvage, and Viktor & Rolf Flowerbomb [5] Company Overview - Klarna is a global digital bank and flexible payments provider, boasting over 114 million active users and processing 3.4 million transactions daily [6] - The company partners with over 850,000 retailers, including major brands like Uber, H&M, Saks, Sephora, Macy's, Ikea, Expedia Group, Nike, and Airbnb, to enhance consumer payment experiences [6]

Okay, let's uh let's keep doing this, Steve. It's it's pretty interesting. For more on all this data, I want to bring in uh Hyundai Yuba Yuva, uh senior US economist at BFA Securities.You're sitting there with Steve. What do you what do you what do you think of what you just heard. >> I think this is a very very impressive GDP report.As Steve correctly pointed out, 8% essentially nominal GDP growth. Consumer spending really beat expectations. This is pretty unusual.I mean we had the monthly data for July, A ...

The US economy expanded in the third quarter at the fastest pace in two years, bolstered by resilient consumer and business spending and calmer trade policies. https://t.co/X5JPdsIVco ...

Economic concerns don't seem to be having a large impact on holiday shopping this season. According to a new Visa analysis, it shows that retail sales increased by 4.2% year-over-year across all payment types. That includes cash and checks.And join us right now with a lot more on that report is Michael Brown, principal US economist for Visa. What was the biggest surprise for you. >> Was just the resilience of consumers.uh as you pointed out, we have seen sort of soft much softer consumer uh sentiment and an ...

Core Insights - Economic concerns have not significantly impacted holiday shopping, with retail sales increasing by 4.2% year-over-year across all payment types, including cash and checks [1] - Despite softer consumer sentiment and confidence compared to the previous year, consumer spending has remained resilient [2] - Even when adjusting for inflation, retail sales are still projected to be up by approximately 2.2% in inflation-adjusted terms [3] Consumer Behavior - There is a noticeable bifurcation in consumer spending, with the bottom 25% of income earners experiencing positive wage growth, albeit lower than the previous year [4][5] - A shift in consumer spending from goods to services has been observed, particularly among younger consumers, with increased interest in travel and experiences during the holiday season [6] Future Projections - Tax refunds are expected to be slightly larger in the coming year due to a recent tax cut package, which may boost early-year consumption [7] - Modest inflation is anticipated throughout the year, along with potential Federal Reserve rate cuts, supporting consumer spending growth projected at around 2.8% year-on-year, an increase from the estimated 2.6% for the current year [8]

Market Trends & Observations - Buy Now Pay Later (BNPL) usage surged during the Thanksgiving to Cyber Monday period, increasing by 6 percentage points compared to the previous year [3] - Cyber Monday saw over $1 billion in e-commerce spending through BNPL services in the US, marking the first time it surpassed $1 billion in a single day [3] - The adoption of BNPL as a new financial instrument is considered notable, driven by its increasing availability at checkout with various retailers [4] Potential Risks & Concerns - The prevalence of BNPL raises concerns about consumers spending beyond their means, especially when considering Black Friday sales [1] - Rising default rates on credit cards, coupled with increased BNPL usage, may indicate a potential problem [2] - The fintech and retail industries might be collectively encouraging consumers to spend money they don't have [2] Retailer Perspective - Retailers find offering BNPL services beneficial, as it allows customers to avoid paying the full price upfront, potentially leading to increased sales [5] - BNPL services are particularly advantageous for retailers offering higher-priced goods [5]

Holiday Sales Performance - The National Retail Federation (NRF) anticipates a record holiday shopping season, with spending projected to exceed $1 trillion for the first time [1][3] - NRF confirms that Super Saturday turnout reached nearly 160 million shoppers, surpassing the 2022 record [2] - Thanksgiving weekend saw a record 203 million shoppers [4] - Sales growth is forecasted to be between 37% and 42% compared to the previous year [3] Consumer Behavior - Consumers are shopping across channels, including online, mobile devices, and brick-and-mortar stores [7][8] - Value-seeking consumers are actively searching for special deals and value [8][9] - Consumers still had more than half of their shopping remaining in early December [5] Economic Uncertainty - Uncertainty is a defining characteristic, impacting retailers' ability to forecast demand and operate efficiently [10][12][13] - Retailers have demonstrated creativity in providing affordable solutions for consumers amidst tariff impacts [10] - The industry desires more certainty, a roadmap, guidance, and predictability for 2026 [11][13]