May 25, 2022 – Farmington Hills, MI – Blue Chip Partners’ Daniel Dusina, Dan Seder, and Matthew Mondoux discuss current market trends and provide recommendations on how to interpret today’s headlines.
Cracks In The Consumer
Dusina advises that while the cost pressures observed at stalwart retailers sent consumer-oriented stocks spiraling last week, there are broader takeaways than just the hit to profitability. Softer staffing, excess inventory, and a shift in spending all serve as evidence for moderating inflation. Overall health of consumer and corporate balance sheets remain intact, while a lack of visible excesses support only a “mild” recession as a worst-case scenario.
The Stock Market vs. The Market Of Stocks
Headline index figures often hide what is happening beneath the surface. Is it all doom and gloom? Seder discusses the major differences between the stock market and “the market of stocks.”
The Unwinding Of Margin Debt
The unwinding of margin debt has played a role in the selloff, and sentiment has followed. Mondoux walks us through some examples of how margin debt exploded throughout 2020 and 2021. As the cost of borrowing has ticked up, favored names of margin users have seen selling pressure.
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