Big Expansion In Productivity

Also on the negative side, Dick’s is seeing a 20% decline in traffic. That because last year there was a huge spike in sporting goods spending once we realized that outdoor activity was safe. There was a massive increase in spending on boating and fishing equipment. On the positive side, Vroom and Carvana are experiencing triple-digit growth. Used car sales are still elevated. Restoration Hardware had the 2nd highest growth, but we think this a company-specific result rather than a macro one. Not everything is macro related even in a pandemic recovery.

Everyone Is In The Market

Now is one of the worst times ever to buy stocks that are popular with retail investors. Even if you think a stock that is widely owned by retail is great, it’s better to be patient before buying it. This is one of the most crowded markets ever. 41% of household wealth is in stocks.

As you can see from the chart below, the spike in TD Ameritrade Accounts as a percentage of the US population is higher than in the tech bubble. E-Trade didn’t get as high, while Robinhood peaked at a higher level than any platform did in 2000. Retail is always late to the game. Many of the momentum stocks have already started falling in the past few weeks. The next step is the burst in the crypto bubble.

Conclusion

Productivity exploded in Q1 which is a great sign for corporations because they are about to deal with high wage inflation. Q1 earnings season was amazing. Yearly growth will peak in Q2, but Q3’s results will also be really good. Web traffic shifted dramatically last year. Now the comps are being lapped which is bad for the COVID-19 beneficiaries. Watch out for investing in stocks that are popular with retail investors. They won’t do well when the bubble in retail trading activity pops.

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Disclaimer: The content in this article is for general informational and entertainment purposes only and should not be construed as financial advice. You agree that any decision you make will be ...

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