Stocks are Falling today because of this Shift

is interesting here receipts at

restaurants bars increase but at a

slower pace so you're also seeing an

inflection point in restaurants and bar

spending at the same time as you're

seeing this pullback in basically people

buying stuff now this is actually

something that the federal reserve

predicted it wasn't necessarily just

kathy wood who mentioned people would

spend a lot and then spend less

jerome powell has been saying this for

well over a year jerome powell has

suggested that look when we have the

reopening at first we're likely to have

this surge of spending but that's likely

to start waning and based on just this

this headline here this receipts at

restaurants bars increased but at a

slower pace looks like we're starting to

see that inflection point start bending

to the downside potentially towards the

downside at least flatten out

let's take a look at some more detail

here u.s retail sales fell in july by

more than forecast and this by the way

is something that we also saw in china

is that retail sales are are coming in

softer than expected and the slowdown is

coming at a faster rate reflecting a

steady shift in spending towards

services remember the differences

between goods and services we got gas in

our economy right good stuff services uh

or uh you know like having people wash

your car or come clean your house or you

know what real estate agent services

right

uh anyway and indicating consumers may

be growing more price conscious as

inflation picks up this right here is

actually probably the most beautiful

thing that they could have said in this

particular article the capacity for

businesses to raise prices

is limited by the people's willingness

to pay so as soon as

nvidia goes we're just going to keep

cranking up you know the the 390 50 chip

or whatever uh then

at some point consumers are like no no

no no no i ain't paying that for a card

right and and that's good you need that

that elasticity of demand essentially to

be low which means people's willingness

to pay more as price goes up goes down

very quickly you want that to happen to

actually help keep

sort of the reins on inflation see there

there can't be inflation if we're all

like

yeah no we're not paying more you know

if we all protested prices would

actually come down we could literally

have j-power printing money and we're

all like you know no i'm not not paying

that and prices will come down it's

great

obviously you know

coordinating the market

has been tried and generally that's

called communism that doesn't work too

well but anyway this is a good sign

clearly here that uh as a whole

the uncoordinated market the free market

is saying yeah no nothing's getting too

expensive the value of overall retail

purchases dropped 1.1 percent last month

following an upward revised 0.7

increased in june that's fine uh median

survey called for uh a 8.3 decrease

excluding autos sales decreased 0.4

so a little bit more of a cut back here

in july take a look at this though folks

this chart should be absolutely zero

surprise

can you guess what the big bars are for

stimulus one stimulus to stimulus three

the kids unite it's twelve hundred

dollars

it's the six hundred dollars and it's

the fourteen hundred dollars remember

when i went to prada what did they tell

us a prada they told us they literally

their best customers were literally

people on unemployment or stimulus check

recipients and guess what expires in two

weeks

unemployment

total receipts trailed estimates by well

at least the federal unemployment boost

right state unemployment well then again

that'll come up for expiration too you

can't be on that forever either total

receipts trailed estimates by a wide

margin as declines in motor vehicle and

e-commerce sales weight on the figure

this by the way this e-commerce sale

plummet here is uh is is one of the

problems uh oh i don't know why this

would be blur in a second

we will fix that

uh but anyway uh one of the problems

that we ended up having

uh with uh with with pinterest for

example just ask another comparison

is uh we we ended up with uh a

substantial sort of

slowing in the amount of time and money

that folks were spending on uh websites

like pinterest or or etsy or or amazon

it's kind of interesting and also

unfortunate since those are some of my

favorites so uh let's see what else we

have here we've got the emergence of the

delta variant poses a risk to economic

activity also true potentially a reason

that we might see

prices uh start start stop stopping in

their crazy run up this is something

we've talked about on the channel before

that delta could actually bring in a

period of deflation higher prices for

things like groceries meals personal

care and apparel uh

risk limiting discretionary spending in

coming months this is true limiting that

discretionary spending while at the same

time having delta yeah those are

deflationary forces a report last week

from the university of michigan showed

conditions deteriorated to the lowest

level since april of last year as

inflation remained this is the

confidence index so we're seeing

confidence in fleck down people's

willingness to spend rotating down stock

futures going down right

results from home depot showed weaker

than expected results and signaled the

cooling and the home improvement boom

we're seeing car prices start rotating

down especially as they're affected by

supply chain shortages folks if you're

wondering why is the market slowing down

why is the market turning red well in

very much part it's because people are

saying enough is enough we spend

ourselves to oblivion now we've got

delta concerns it's time to chillax on

the spending a little bit we're not

willing to pay high prices forever and

so we're actually going to lit inflation

by not letting these prices run away

because we're voting with our wallets

and we're not going to pay for it

anymore see this here could potentially

buoy

lower lower spending let's see here

investors bet that corporate spending

and buybacks will support stocks i don't

know about that let's see investors are

betting that cash rich companies will

spend incre will increase spending on

everything from factories to share

buybacks a combination many believe will

boost stocks in the coming months i mean

it's possible you even had enface do a

bunch of buybacks in may but that was

also when their price was in the hole i

mean you literally had a board that

bought the dip there i mean that was

impressive in my opinion that was that i

very much liked

uh yeah that was good

hoard of cash held by u.s companies is a

key

comfort for u.s investors despite

worries of the spread of delta

that could dent the recovery yeah no

kidding it's true there's a lot of cash

i mean look at this look at the amount

of cash at companies

oh my gosh it just skyrocketed after the

pandemic

well during the pandemic i should say

that's a

interesting thing i mean look yeah

i said what would you rather have a

cash rich company or cash poor company

right now i think that's a no-brainer so

no real surprise there

so very interesting keep an eye on this

stopping of consumer spending especially

with delta fears

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