Proprietary Data Insights
Top Luxury Goods Stock Searches This Month
Story Stocks: Tying It All Together
One of the wonderful things about investing is you have myriad strategies to choose from.
Quantitative. Qualitative. A little of both.
Over the past couple weeks, The Juice has told stories illustrating the state of the broad economy and our personal finance to develop narratives around stocks. With this qualitative approach to investing:
Tie it all together. Come to some conclusions. Consider moving forward with what makes sense to you. Discard the rest. Buy and sell stocks accordingly.
As personal savings rates continue to decrease, cash-strapped consumers turn to credit card debt to finance life. Barely making ends meet amid inflation, this subset of the population shops for necessities at dollar stores.
Story Stocks #1
Dollar General (DG) and Dollar Tree (DLTR) both report solid earnings and impressive guidance.
On its conference call, Walmart (WMT) blames its struggles on a shift in spending. Its customers are diverting cash away from higher-margin general merchandise (discretionary spending) items to lower-margin groceries (needs).
Get the full scoop on story #1 here.
Not everyone in America is hurting. In fact, some people are doing quite well financially, thank you.
Story stock #2
Costco (COST) disses Walmart and other “discount” retailers. The warehouse chain has seen no worrying spending shift. The Costco customer might be buying fewer pandemic-related items (e.g., sporting goods, office supplies), but they’re still strong and seemingly confident.
Get the lowdown on story #2 here.
See how that works? You can perform this following the data exercise across industries. We’ll keep providing examples in future editions of The Juice.
Actually, the Costco story got us thinking. How is high-end, luxury retail looking lately? Expect to hear from us on the subject later this month.
You might think the wealthy are all financially healthy. Think again. Scroll with us.
$250,000 A Year And, Yes, They’re Living Paycheck To Paycheck
Source: PYMNTS.com/Lending Club
This chart and finer grain data from it is absolutely mindblowing.
Here’s where it gets even more unbelievable:
Think about that.
Before taxes, $250,000 a year equals $20,833 a month. In relatively high-tax California, the typical single person making a quarter of a million bucks takes home roughly $12,350 each month.
That’s a big tax hit, but still.
Struggling Or Just Financially Unhealthy?
The study does note that of paycheck-to-paycheck Americans, 31% have no difficulty meeting their monthly expenses, even though they fail to have a cash surplus at the end of the month. Meantime, 22% say they do experience trouble paying their bills.
It should come as no surprise that the paycheck-to-paycheck crowd carries higher credit card balances. This holds even when controlling for income.
The Bottom Line: Talk about tying it all together. Talk about this insane, so tough to make sense of economy we’re living through.
We tend to automatically think it’s only people with relatively low incomes who live paycheck-to-paycheck. Obviously, this isn’t the case.
From this, we can (probably) safely assume that at least some of these high earners put themselves into situations where they bit off more than they can chew. Maybe they bought more house than they could afford. Or rented an apartment too rich for their blood. That Tesla or Audi in the driveway. Yeah.
Makes the stories we’re telling around discount retailers and the one we’re going to tell you later this month about luxury retail even more compelling.
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