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Market Commentary

Toll on Americans

By Charles Payne, CEO & Principal Analyst
3/22/2024 12:56 PM

This morning, Nike (NKE) was competing with FedEx (FDX) over which would be the hottest stock of the session…then came the conference call.  The company, which saw sales come in lower in North America despite the media’s desire to paint a different narrative also sees China sales weakening as well.

Management offered tepid growth expectations and will focus on cutting $2.0 billion in cost over the next three years.  So, thirty-one minutes into the earnings call shares collapsed and the parade of analysts tripped over themselves in a rush to turn the other way.

They all cut their estimates on the stock.

Its not just Nike (NKE), as Lululemon (LULU) shares are experiencing its fourth worst session ever, down 16%.

Consumers are not only backing off expensive sneakers and gym gear.  The CEO of Circle K says diesel demand continues to be weak and that’s an indicator of softness in some sectors of the economy.


And we know things are bad when consumers start giving up on going out for dinner. It has become the post-pandemic luxury for most Americans.  Now, Darden Restaurants (DRI) is signally that trend is slowing down.

Ironically, we have just seen a wave of economic data that paints a different picture for the economy. What the two narratives have in common, however, is lots of money pouring into the economy. While it moves the economic needle, it also keeps inflation elevated, and those high prices have begun to take a toll on Americans.


The rally baton passed from an accommodative Fed to a strong economy, and it has been poised to go back to the Fed, but what if consumers are too tapped out to overspend and inflation too high to cut rates?

This is what we are grappling with.  But we do not want to overthink it, because this rally has been driven by emotions, and it will be for a while. 

Have a great weekend. 


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