VCR News and Press, Vanguard Consumer Discretion From 10/27/22

Summary The mismatch between supply and demand within the retail space has reversed in advance of this year’s holiday shopping season. Higher prices that retailers have successfully implemented since the pandemic are not going to reverse entirely. Higher inventory level...

Summary We forecast Halloween candy prices to be up 14% over last year. Purchases of candy (i.e. volumes) have been trending lower since last October, partly in response to rapidly rising prices. Total spending on Halloween candy, at $3.2 billion, is expected to be only 1% abo...

Summary We believe that investors will differentiate and favor stocks based on quality factors as companies with higher-quality and growth characteristics are more likely to weather the storm. We seek to identify industries whose profits are growing at least as fast, or ideally fa...

Summary PPI and CPI numbers came out last week, and both were higher than expected. Fed officials are concerned about the persistence of high inflation, and a 0.75% key interest rate hike at the November FOMC meeting is virtually certain. Worldwide demand for crude oil naturally r...

Summary The most attractive subsector regarding valuation and quality is durables and apparel. The worst-looking one is auto and components. XLY fast facts. 10 stocks cheaper than their peers in October. For further details see: XLY: Consumer Disc...

Summary E-commerce valuations ebbed as cooped-up consumers craved real-world experiences - but a closer look at the data suggests online shopping is unlikely to retreat. Since the height of the COVID-19 pandemic, e-commerce’s share of total retail sales has fallen to 14.5% ...

Summary Balancing inventory supply and demand is simple in theory, but difficult to execute. Retailers misestimated categories of demand and logistics issues, leading to more late arrivals. The winners will be consumers who take advantage of heavy promotional activity. ...

Summary We expect macro headwinds will continue to pressure U.S. corporate earnings in the coming months. We expect earnings expectations to decline as multinational firms realize foreign exchange headwinds that accelerated over the past year. Investors can avoid undue interna...

Summary September consumer confidence data verified hotter numbers than the expectations this morning. Interest rates surged later in the day to fresh cycle highs. More data is on deck Friday, and the Vanguard Consumer Discretionary Sector ETF remains well above its June low. ...

Summary A number of advisors have reported higher than normal inventories as an additional sign of pending recession. The data does not support this perception. Business Inventory/Sales…and Retail Sales vs. Trucking… reveal a considerable deficit exists in business I...