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.

We’ve been expecting the consumer to hit a soft patch, and recent employment data have made that outcome more likely.  Fiscal stimulus and rate cuts will help stave off a bigger issue, but portfolios might still need to be reoriented.  We think rate-sensitive names will continue to work — we’re especially fond of housing-related stocks.  And, we built three frameworks to identify stocks that can bridge a gap.  They identify issues with (i) pricing power, (ii) asset-light models, and (iii) good shock absorbers.

This webinar details our outlook for the consumer.  H2 ’25 will be turbulent due to a lopsided employment picture, incomes that are not as strong as they appear, an immigration headwind, collateral damage from student debt repayment, and tariffs.  We expect the consumer to recover in early ’26 due to stimulus, but investors might want to be prepared for a choppy ride.  We recommend finding stocks with pricing power and bulletproof business models.  We introduce a couple of frameworks to help chart the course.

There’s a lot going on in consumer land, and this webinar measures the headwinds and tailwinds facing the consumer in 2025 and 2026.  Late last year we grew concerned that the consumer was off kilter — employment and spending trends were unbalanced, and we were concerned that policy would dampen spending growth.  Now that fiscal stimulus is in the works, our outlook has turned more neutral.  There’s lots of math in this presentation, especially as it pertains to policy — immigration, tariffs, and fiscal stimulus. …

We’ve been cautious on the consumer for the past six months.  It’s not just about tariffs.  Employment growth is lopsided, PCE growth has been of low quality, immigration will soon begin to weigh on aggregate demand, the credit impulse is muted, the “wealth effect” is reversing, and real wage growth is already slowing.  Tariffs are a headwind, but they don’t anchor our view.  This 30-minute webinar walks through a ton of useful data.