What Has Gotten Into Bank Stocks?
* The consumer is ‘spent up, not pent up’…
The same thing that has got into the shares of Walmart (just look at the sickly $WMT chart) and other consumer staples — a weakening consumer.
The low-end and middle-end consumer has lived on borrowed time — the dwindling savings rate (now at about 2.6%%) suggests the consumer, plagued by a weak jobs market and an acceleration in the rate of inflation, is spent up and not pent up:
The consumer forms the core foundation of most banks.
While the K-shaped economy has buoyed the wealthy (with large balance sheets, invested in stocks and real estate) — a crack in equities could adversely impact the resilient and higher-end consumer.
Position: None
