• BlockFi looks to be the next domino to fall as radiation from the FTX Ponzi infects the industry
• Donny T threw his hat into the ring for 2024, setting up an epic showdown with DeSantis in the primary
• It’s going to cost you more to get into the happiest place on Earth
• NASA’s Artemis I, the first step in a broader plan to increase the human presence on the moon, launched successfully

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Shoppers Dump Cheerios for Toasted O’s

Recent earnings from big consumer brands are shedding light on shifting spending patterns going into Q4.

We saw with Walmart and Target that the former is snatching share from the latter, as consumers broadly trade down to protect purchasing power. Walmart’s bread and butter of staple goods like groceries and plain t-shirts have held up better than the higher-end products Target carries.

Home Depot and Lowe’s both sailed past estimates for Q3. Professional and DIY products both grew, suggesting that people still feel like they have room in their wallets to make home improvements.

At this point, there are a few high-level themes we can take away:

• Most people see groceries, whether they’re from Kroger or Aldi, as largely the same and are opting to trade down in order to save. That has come at the expense of Target and Whole Foods and has been a boon to Walmart
• FedEx’s dire warning in September about a massive slowdown was tempered by strong retail data in October. That could be a temporary bump or a sign that the consumer is more resilient than originally thought
• Santa may get the short end of the stick this year as millions of households plan to scale back on Christmas presents

It’s a murky picture at best, but generally, most experts seem somewhat surprised that spending has held up this well despite all the reasons to cut back.

People aren’t willing to scale back on what they see as essentials, so impulse buys are on the chopping block. But, they’re also ponying up for expensive experiences. All the conflicting signals can make your head spin.

When you really cut through all the bullsh*t, though, the simple theme is that consumer staple companies will be alright, and nice-to-have sellers will suffer. Pretty much recession 101.

Source

Lowe’s ($LOW) ↑ 2.97% ↑

• “We’re not seeing the negative impacts of inflation.” — CEO Martin Ellison. Must be f*king nice!
• Guidance was upped for the balance of the year as home improvement looks to be insulated from inflationary pressures slamming other industries

The Hershey Company ($HSY) ↑ 2.63% ↑

• The official chocolate bar of s’mores (probably) posted strong gains in Q3 on the back of higher prices and insatiable demand for its bars
• The maker of Reese’s and Kit Kat has even been surprised with how well sales have held up as other name-brand snacks have suffered