"Worse Under The Hood": Goldman Warns Consumer Stocks Cracking As Hedge Fund Exposure Tanks
The short version
- Goldman Sachs' Scott Feiler warned Tuesday that consumer stocks have suffered several difficult weeks of underperformance…
- Feiler explained: Worse Under the Hood: Consumer stocks have had a tough run the last few weeks.
- The Retail group was -6.5% in August and underperformed the market by over 5%.
- It has felt a bit worse than that under the surface, given many of the historically owned/quality/growth names have seen sell-offs of 10% to 50%.
- A list of 10 of these stocks and a few tactical thoughts on each are below...
The story
With the US national average for gasoline above the politically sensitive $4-per-gallon level and the University of Michigan Consumer Sentiment Index signaling waning household confidence as summer enters its final innings, pressure is building across the consumer complex.
Goldman Sachs' Scott Feiler warned Tuesday that consumer stocks have suffered several difficult weeks of underperformance, while investor exposure to the sector has collapsed to multi-year lows.
Feiler explained:
Worse Under the Hood: Consumer stocks have had a tough run the last few weeks. The Retail group was -6.5% in August and underperformed the market by over 5%. It has felt a bit worse than that under the surface, given many of the historically owned/quality/growth names have seen sell-offs of 10% to 50%. A list of 10 of these stocks and a few tactical thoughts on each are below...
More importantly, Feiler cited Goldman's prime brokerage data, which show that gross exposure to retail stocks has plunged to a multi-year low, signaling that hedge funds have reduced their exposure this year. The reduction in exposure likely stems from higher gasoline and diesel prices at the pump, combined with elevated inflation, dampening household confidence.
The 10 pullbacks from peak summer prices highlighted by Feiler include:
- Dick's Sporting Goods: -45%
- Burlington Stores: -32%
- On Holding: -30%
- Tapestry: -26%
- Walmart: -23%
- Viking Holdings: -22%
- TJX Companies: -21%
- Ralph Lauren: -19%
- Hilton Worldwide: -14%
- Ross Stores: -13%
Goldman consumer stocks versus AAA retail gasoline
For more on Feiler's tactical views on the 10 names above, Professional subscribers can read the full note here at our new Marketdesk.ai portal.
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The Story At A Glance
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- • Consumer stocks are underperforming with major retail names dropping between 10% and 50%.
- • Hedge fund exposure to the retail sector has hit multi-year lows.
- • High gasoline prices above $4 per gallon and persistent inflation are driving consumer weakness.
Goldman Sachs reports a significant pullback in consumer-related equities as household confidence wanes. This decline is driven by rising energy costs and a broader economic strain on American families.
Christian Perspective
Economic instability directly threatens the ability of the patriarchal family to provide and maintain a stable household. High costs for basic necessities like fuel act as a tax on the hardworking citizens who form the backbone of a moral society. Financial volatility undermines the peace and security required for spiritual and communal growth.
Implications
A weakened consumer base signals a breakdown in the economic sovereignty of the American people. When families struggle to afford essentials, the social fabric frays and the traditional order is jeopardized. This instability makes the nation more vulnerable to the whims of globalist financial institutions.
Broader Trends
The decline in consumer spending reflects the consequences of failed liberal economic policies and runaway inflation. These macro trends often coincide with the erosion of national strength and the displacement of the domestic working class. Economic hardship is frequently used by hostile elites to destabilize the host nation.
Takeaway
Americans must prioritize self-sufficiency and financial prudence to protect their families from market manipulation. Support for America First policies that lower energy costs is essential to restoring national vitality. Strengthening the local economy and the traditional family unit remains the best defense against globalist economic warfare.
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