US Consumer: Worried Or Not?

Worries on the US consumer

Worries on the US consumer took a meaningful turn last week. Macro indicators suggest the labor market and consumption is slowing. Investor worries manifested itself in a sell-off in Restaurants (-4%) as this is a category that tends to show the first signs of financial stress. Also, investors are now turning more cautious on leisure with short additions pushing short exposure to the top decile since 2021. Investors have even turned more cautious on housing (a place they have been bullish all year) on the notion that the recovery curve could take longer and be flatter than expected. 

We shouldn’t dismiss what’s in front of us