CNBC Television
'Fast Money' traders talk a diverging consumer picture
11/5/2025, 10:47:58 PM
Economic Summary
- The consumer is bifurcated (K-shaped): affluent and upper-middle consumers remain able to spend on premium goods and experiences (e.g., DAL, AAPL, KO, RL), while lower-income consumers are strapped, trading down or cutting spending on restaurants and discretionary items (pressure on EL, CPRI, dollar stores).
- Housing is constrained by high mortgage rates (many expect 30-year rates not to fall below ~6%), leaving homeowners house-rich but cash-poor and depressing home-related demand (weakness in TREX, HD, broader housing stocks).
- Experiences demand may be softening after pandemic-driven strength: Live Nation (LYV) missed earnings and declined, suggesting some unwind in event/ticket demand and signaling risk for experience-oriented companies.
- Retail outlook points to heavier discounting into the holiday season, which will likely boost sales volumes for some but compress margins across department and electronics retailers (e.g., BBY, DKS) and create idiosyncratic winners and losers across price tiers.
Bullish
- Delta seeing strength in premium (first-class) demand.
- Apple continuing to sell strong iPhone volumes.
- Coca-Cola growing premium product sales.
- Costco benefits from affluent customers buying in bulk.
- Ralph Lauren and Williams-Sonoma showing strength at the high end.
Bearish
- Live Nation missed earnings and its stock fell sharply, signaling softer demand for experiences.
- Housing-related names (e.g., TREX, HD) under pressure as mortgage rates keep the market locked.
- Restaurants and lower-income consumer segments are struggling; SNAP uncertainty may worsen stress.
- Dollar stores and value retailers have been in a rough slump versus premium/affluent channels.
- Heavy holiday discounting expected, which will pressure retailer margins (promotional environment).
Bullish tickers
DALAAPLKOCOSTRLWSM
Bearish tickers
LYVTREXHDELCPRIDKS
RL
Bullish
RL is cited as hitting highs, benefitting from strength at the higher end of the consumer bifurcation.
Bearish
Luxury apparel could be vulnerable to idiosyncratic consumer shifts despite some high-end strength; not immune to discretionary weakness.
TPR
Bullish
Not specifically singled out as a winner in the transcript; mixed outlook across apparel.
Bearish
Tapestry may face pressure from mid-tier discretionary weakness and shifting consumer preferences.
TGT
Bullish
Target benefits from trade-down behavior as consumers seek value, capturing spending from those cutting back.
Bearish
Target could face margin pressure from promotional holiday environment and trade-down shoppers impacting product mixes.
WMT
Bullish
Walmart is emblematic of consumers 'trading down' but still able to spend, supporting continued demand.
Bearish
Walmart may reflect broader consumer stress and lower-end spending patterns; margins could be pressured by promotions.
MCD
Bullish
MCD shows signs of value-meal reliance and resilience in trade-down consumption patterns.
Bearish
McDonald's faces pressure from lower-income consumers and SNAP uncertainty which could reduce traffic.
LYV
Bullish
Historically benefited from post-pandemic experiences tailwinds, but recent results are negative.
Bearish
Live Nation missed earnings and fell sharply, indicating weakening demand for events and experiences.
TREX
Bullish
No clear bullish case presented; company suffered significant share-price weakness tied to housing trends.
Bearish
TREX plunged on housing demand weakness, signaling softening in home-improvement discretionary spending.
HD
Bullish
Home improvement can be resilient in pockets, but current rates and housing dynamics are a headwind.
Bearish
Home Depot traded down in sympathy with housing weakness, reflecting pressure on home-related spend.
DKS
Bullish
Could gain from demand for value-priced sporting goods if consumers prioritize essentials and value.
Bearish
Dick's and similar discretionary retailers may face heavy discounting and margin pressure into the holidays.
BBY
Bullish
May benefit from holiday electronics demand if consumers concentrate spending on key gadgets.
Bearish
Best Buy expected to face promotional competition and potential margin compression during holiday season.
COST
Bullish
Costco benefits as affluent customers buy in bulk and bundle, supporting continued strength.
Bearish
Costco could see slower spending from strained lower-income shoppers, though less impacted overall.
DAL
Bullish
Delta is seeing unusually strong premium/first-class demand, a positive signal for high-end travel spending.
Bearish
Airlines face uncertainty from macro and consumer leisure spend; exposure to broader travel demand swings.
KO
Bullish
Coca-Cola is selling more premium products, indicating strength in higher-margin SKUs.
Bearish
Coke may face volume/mix risks if broader consumer trading down accelerates.
AAPL
Bullish
Apple is selling more phones, showing resilience in premium consumer tech demand.
Bearish
Apple could be vulnerable if discretionary tech spending weakens, though not emphasized in a bearish way.
WSM
Bullish
WSM is trading at strength, benefiting from demand for premium home goods.
Bearish
Williams-Sonoma could face cyclical risks if home spending or housing market deteriorates.
CPRI
Bullish
Some brands within the portfolio can perform idiosyncratically, but transcript notes overall weakness.
Bearish
Capri Holdings at a 10-year low, reflecting weak performance among certain accessible luxury brands.
EL
Bullish
Not highlighted as a current winner; faces headwinds in prestige beauty spending.
Bearish
Estee Lauder is struggling, signaling softness in beauty and prestige categories.
People mentioned
GuyDan