Key Points: In a recent report we assessed whether the consumer was hitting a soft patch or a wall. We concluded that they are more likely to bend than break. It’s rare for a recession to arise when real PCE is positive, but even a slowdown in spending can create risk to earnings. This report introduces a framework that can help identify stocks with the most – and least – earnings risk. Companies in the
Key Points: The strength and consistency of the US consumer have provided ballast for the broader economy, but lately there have been some signs of fatigue. The aim of this report is to determine whether the consumer is hitting a soft patch or a wall. Last year the consumer had to contend with enormous crosscurrents. At the end of the day though, job gains, strong wage growth and the drawdown of “excess savings” overpowered the
Key Points: Since founding Rubinson Research one year ago, we’ve developed dozens of frameworks to measure the well-being of the consumer – both in aggregate and by income cohort. Those indicators led us to be bullish on the consumer for the past year. Our frameworks though, are no longer as supportive as they had been. Labor markets are strong and balance sheets are fortress-like – but we are seeing some signs of strain. People are
Key Points: The food industry tends to be fairly staid with annualized growth of ~2% in real terms. The pandemic, however, upended consumer behavior, and channel shares have swung wildly over the past few years. This report studies the food sector from three perspectives – retailers, restaurants, and packaged food companies. At its peak, spending on food at home outpaced ‘normal’ by $42 billion in real terms. That’s since been whittled down to $12 billion,
Key Points: The consumer wasn’t the cause of upheaval in the banking system, but they may still feel some collateral damage. This report focuses on two key risks that could affect future spending – consumer liquidity and access to credit. The consumer has been highly liquid over the past few years, and that’s helped them part with “excess savings” to fuel consumption. However, the cost of liquidity has increased now that the yield on a
Key Points: The narrative around the US consumer seems to have shifted. As recently as a few months ago, we were hearing predictions of doom and gloom, but ever since the January jobs and retail sales data were released, the primary concern we’re hearing is that the consumer is running too hot. This report seeks to understand where the consumer is headed. We assess both the relevant data and consumer behavior. The data tell us
We built 3 new interactive dashboards to (i) add insight to your investment process, and (ii) save you time! “What Makes Them Tick?” lets you see how 125 stocks respond to 24 macro variables. It tells you how each retailer respond to supply chain pressure, how each leisure name reacts to labor conditions, etc. “Does Macro Matter?” lets you sort returns based on hundreds of macro conditions. Sort by alpha, “hit rate” or spread for any macro condition. “How They Behave” analyzes the correlation of…
The consumer is in an awkward spot. Real disposable income is in negative territory — a rare sight. PCE has held up, however, due to OBBB benefits and a declining savings rate. Some think the savings rate is a red flag… we see it as yellow. Consumer stocks have been a minefield. The sector has felt irrelevant in an AI world, and sales and earnings trends have lagged the broader market… despite a shot in the arm from tax refunds. We think the consumer will…
The consumer is perceived to be the stalwart of the US economy, but it’s more nuanced than that. After all, the two largest consumer markets — housing and autos — have been floundering. Those pockets of weakness have given oxygen to other areas of consumption. So long as that’s the case, the status quo can prevail. To assess what lays ahead, we quantify the macro crosscurrents acting upon the consumer. We also offer an outlook for global brands, retail stocks, consumer staples, leisure, housing and…
Rubinson Research is now four years old. We were more optimistic than most for the first three years and we’ve been more cautious than most for the past year. We’re not betting against the consumer, but our sense is that companies (and some investors) are taking the consumer for granted. We always stick to the math, and absent a major uptick in employment, the outlook isn’t terribly inspiring. This 30-minute webinar is chock-full of thought-provoking data.
We’ve spent a lot of time trying to understand how the consumer will behave in 2026 and 2027. Population growth will be anemic, job growth is already weak, and the risk associated with AI is on the come. The OBBB will serve as a counterweight, but it’ll be more of a sugar high than a panacea. We think retailers are the best bet in consumer-land due to (i) elevated tax refunds, (ii) a rate environment that favors goods over services, and (iii) the global brand-emic.
The consumer has been a juggernaut, but the math doesn’t add up. Employment, the engine of consumption, has stalled. It’s not because of AI — that risk is still in front of us. The high-end has been driving PCE, but the “wealth effect” is probably not as durable as some suggest. Our math says a 2% change in home values is worth as much as a 10% move in the S&P. We are cautious on leisure. It makes sense to own retailers during a brand-emic.