by Tyler Durden at ZeroHedge
Yep, we went there and unleashed the ‘deer in headlights’ image…
While most blinkered investors ignored last week’s record surge in revolving consumer credit (i.e. credit card spending), this week’s Walmart and Target earnings brought it home to the rest of the country that the “American consumer is strong” or “consumer has best balance sheet ever” narrative imploded, crashing on the shores of a gigantically lopsided and divided national aggregate that hides the reality that most of America is unable to pay the ‘cost of living’ under Bidenomics 40-year-high inflation without resorting to the plastic. Additionally, we are hearing more investors coming around to the idea that Powell’s comments were anything but ‘less hawkish’ – he unequivocally put 75bps back on the table with his ‘if things do not go as planned, we will do more’ comments… it just seems like nobody wanted to hear that yesterday!?
TGT and WMT are a bloodbath this week (-29% and -17% respectively in the last two days – worst drops since 1987)…and to pile on the ‘recession’ trade, Disney’s CFO warned that “growth in per capita parks spending will slow”..
Source: Bloomberg
NOTE – these are not widely held hedge fund names – they are, however, extremely widely-held ETF and passive investor names… when do the passive hand-sitters, reach for the mouse and end the pain?
That ugly realization appeared to finally hit home today as Housing data confirmed the signals from the retailers, sending stocks and bond yields plunging lower (and the yield curve dramatically flatter) as stagflationary themes are becoming base case for many.
Nasdaq was the biggest loser today but chatting with some more ‘seasoned’ traders, almost everyone said a similar thing – this is the calmest major selloff they have ever seen, no panic puke, just slow and steady derisking (again perhaps signaling a VWAP seller and more passive investor unwinds):…
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