RE:RE:RE:RE:Target CEO says the consumer remains resilientI'll agree the real estate sector is stressed. Low income consumers are stressed. Are there cracks? Yes. But, no "hurricane", as Jamie Dimon incorrectly called it, is about to hit. We just had a 10% correction where many of the bears were quick to start banging the recession/depression drum. But, this is not a 2008 moment. Not even close. Could we see another 10% - 15% selloff? Absolutely. But, not +30% as during covid or 50% as during the GFC.
FED Powell yesterday said a September rate cut is very likely. This is new language for him. The pivot from hiking to pausing to cuts is now underway. And it won't be a one and done either. Tiff has already cut twice and with CPI now at 2.5%, another cut on Sept. 4 is a slam dunk.
The path towards slow and steady cuts is the soft landing dream come true that bears can't wrap their head around. Over the next 2 years we will likely see rates up to 2% lower off the peak. It's why the US 5 yr is now back below 4% and falling. For Canada, this will come at an opportune time as the bulk of mortgages taken during covid come due in 2024-25. Had rates gone higher, we would be in a tough corner. That would have been the hard landing case. Didn't happen. Not happening either.
Torontojay wrote:
savyinvestor333 wrote: What does Starbucks, McDonalds and Home Depot have in common with Reitman's? Nothing I would say
What they all have in common is that they are part of consumer spending which is two thirds of gdp. Home Depot is a bellwether for the US economy much like Canadian Tire would be for Canada. Btw, the last time Home Depot reported y/y decline in sales was 2008 during the GFC. Not a good sign.