Photo by Erik Mclean on Unsplash
 

In our latest Week Ahead Video, we talked about how this week’s slow economic calendar is going to leave investors and traders alike parsing through this week’s earnings releases for trading guidance.

That first signal dropped, and it was a bit of a potential wake-up call as McDonald Corp (MCD) posted a miss on both top and bottom lines. CEO Chris Kempczinski talked about how they warned of “ a more discriminating consumer, particularly among lower-income households.” He went on further, stating that “those pressures have deepened and broadened.” The company noted that guest counts were lower but the impact of those lower counts was offset somewhat by higher prices. This gets to the meat of the conversation, which is, given that the consumer represents about 70% of GDP, do they have enough left in their checking account to make it through this part of the cycle?

There’s been a fair amount of ink spilled on the resilience of consumer. The reality is that while inflation has slowed considerably we are still dealing with prices that are at all-time (and for many, unreasonable) highs. Outstanding credit card debt has been hitting new highs regularly but looking over the long-term trend the pace of that growth has been moderating over the past year or so, so its something we’re keeping an eye on but it’s not a bona fide worry.

The rest of this busy earnings week will give us a lot more data points on the consumer, starting with today’s Proctor & Gamble (PG) pre-market release. The company posted a beat but warned about increased commodity input costs and foreign exchange headwinds in 2025. Other consumer staples names like Philip Morris (MO), and Anheuser-Busch Inbev (BUD) will report, and for the well-heeled among us, Ferrari (RACE) will announce on Thursday. We will get a more comprehensive consumer update as Amazon (AMZN) kicks off the back half of summer with earnings, expected to come in at $1.03, a full $0.40 over the previous year’s result.

Tying into the consumer picture will be a number of payment processing and consumer finance names like PayPal (PYPL), SoFi (SOFI), Mastercard (MA), Block (SQ), and Coinbase (COIN).

Updates on the consumer are great to get but given that the Fed meets tomorrow and the Fed Funds Future curve is pricing in a 95% chance of no move, it’s not clear that a handful of companies posting a soft quarter will be enough to sway the Fed into changing their overall outlook.

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