Inflation, Spaving, Bankruptcy, & the Market's Performance
Welcome to The Market Moment! | Episode 203
Hey there, Market Moment community! Welcome back to another episode. Joining you this week are Matt, Lee, and John. They have some intriguing topics lined up for you: the impact of inflation on America's spending habits, the role of bankruptcy as a shield, and the concept of "spaving".Ā
Consumer ETFs Showing the Real Inflation Picture
We're kicking things off with a look at how some ETFs are revealing the true impact of inflation on consumer behavior. The Consumer Discretionary Select Sector SPDR ETF, featuring big names like General Motors, Chipotle, and Deckers, has seen a downturn this year. In contrast, the Consumer Staples Select Sector SPDR ETF, with holdings like Procter & Gamble, Costco, and Walmart, is up more than 8%.
Walmart, the nation's largest retailer, reports that it's attracting more upper-income shoppers, those earning above $100,000. CFO John David Rainey noted that these customers are spending more on essential items and less on discretionary products. Meanwhile, luxury brands like Burberry are facing significant losses, with annual profits down 34% and same-store sales dropping by 1%.
Spaving
Have you heard of "spaving"āspending more to save? This old concept, now rebranded, is prevalent in grocery stores, retailers, and even online gambling. Financial expert Bryan Kuderna explains that spaving encourages consumers to buy more than necessary to feel like they're getting a deal. Common tactics include "buy one get one free" offers, in-store cash for future purchases, freebies, and store credit cards. The key takeaway: avoid buying under pressure to steer clear of these marketing traps.
Is Bankruptcy a Shield?
We explore whether corporate defendants can use federal bankruptcy to shield themselves from legal trouble. The Supreme Court is set to consider this issue, particularly in the case involving Purdue Pharma and the Sackler family. The question at hand is whether the Sacklers can use bankruptcy to protect their personal fortunes from opioid-related liabilities. Justices are debating whether bankruptcy laws were intended to prevent personal injury victims from suing third parties not directly involved in bankruptcy proceedings.
Comment Time!
This week's comment comes from our YouTube channel, where Eli discussed whether young people can buy houses. @camleborgne6121 shared his experience, saying, "I welded in New England. Everybody I knew that was my age (23) + maybe 5 years was renting. I don't know a single person from back home that owns a home. Just recently moved to South Carolina, I'm still a welder and every co-worker I've met so far that's my age or a few years older, owns a home. Was a pretty big wake-up call for me."
We'd love to hear your thoughts! Leave us a comment, and if you're an audio-only listener, submit your questions and comments to [email protected]
Thanks for joining us this week. And if you want to see our lovely faces or watch our other videos, check out The Market Moment YouTube channel.
See you next Tuesday for the latest market headlines!
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