(Michael M. Santiago/Getty Images)

Americans are so upset about the economy they can hardly enjoy all their toys and cheesecake

Despite the current narrative that the economy is a top concern among voters, consumers sure are spending freely on movies, games, and booze.

Matt Phillips

10/31/24 1:53PM

We’ve said it before, but when it comes to assessing how Americans really feel about the economy, look at what they do, not consumer-sentiment surveys.

After all, Americans are increasingly unlikely to respond to polls.

Maybe that’s because they’re out shopping?

New numbers Thursday showed that inflation-adjusted consumer spending rose 3.1% in September compared to last year, the biggest annual jump since last December.

Digging into the details of the report, the financial strain on Americans becomes increasingly clear. Inflation-adjusted spending on booze rose 3%, the highest since last December. Wine was up 2.8%. They spent nearly 10% more on “games, toys & hobbies” than they did last year, and 44% more at movie theaters.

They spent 9.1% more on hotels and motels. And while spending at fast-food restaurants was down an inflation-adjusted 0.6%, spending at other restaurants was up 2%, the biggest jump since last November. Gambling, while down incrementally, is still hovering near never-before-seen highs.

Companies are seeing the same thing. Just yesterday there was a parade of incredibly rosy earnings reports from owners of salt-of-the-earth, sit-down restaurant chains like Brinker International — parent of Chili’s — and The Cheesecake Factory that sent both their stocks sharply higher, as did solid results for trip-booking website Booking Holdings.

This may come as a surprise, given the level of supposed concern about the health of the economy in this politically fraught season. (The economy is consistently spotlighted as the top concern among voters.)

To the extent that people’s complaint about “the economy” is that things cost a fair bit more than they used to, fair enough. Prices, as measured by the consumer price index, are up 21% from their level at the end of 2020. (The price rise in a comparable period between December 2015 and September 2019, before the pandemic hit, was just under 9%.) And prices for some major nondiscretionary monthly bills, like housing and electricity, have been especially sharp.

But the economy is more than just price increases, which, by the way, are quickly getting back to normal. (The Fed’s preferred gauge, released today, clocked in at just 2.1% year over year, almost bang on the central bank’s target.)

Plenty of other economically significant metrics — job creation, GDP growth, corporate profits, household wealth, heck, even stock-market performance — suggest the nearly $30 trillion mega tanker that is the US economy continues, for now, to steam ahead no problemo.

And even if they aren’t saying that to pollsters, the remarkably durable and strong spending of US consumers — which would turn sharply lower in an actual economic downturn — suggests that, deep down, Americans know that, too.

J. Edward Moreno3h

Hims’ COO to step into advisory role months after joining the company

Hims & Hers Chief Operating Officer Nader Kabbani — an Amazon veteran who joined the telehealth company in May — will leave his post next month, the company announced in a Thursday regulatory filing.

Kabbani will begin an advisory role with the company starting November 2 and Mike Chi, who is currently the company’s chief commercial officer, will assume Kabbani’s title and duties.

Kabbani, who helped launch Amazon Pharmacy at the robotics company Symbiotic, took over from Melissa Baird, the company’s longtime COO who transitioned to an advisory role earlier this year.

Kabbani joined Hims at a tumultuous time. The company saw explosive growth when it started selling copies of popular weight-loss drugs made by Novo Nordisk last year while they were in shortage. But now that those supply constraints have waned, it’s limited in how much it can continue selling. Meanwhile its core business has slowed down, which resulted in disappointing revenue numbers in its most recent quarterly report.

Tasha Matsumoto

The S&P 500 and Nasdaq 100 post second consecutive all-time closing highs

This is the 30th closing high for the benchmark index in 2025.

CHICAGO, IL - JANUARY 14: Chicago Bulls mascot Benny the Bull during a game against the New Orleans Pelicans and the Chicago Bulls on January 14, 2025 at the United Center in Chicago, Illinois.

Matt Phillips7h

AST SpaceMobile surges as satellite services theme gains market traction

Space stocks jumped on Thursday, led by a surge in AST SpaceMobile after Bell Canada named the Texas-based satellite services provider as a partner for a new direct-to-cellular service it plans to offer next year.

AST is up more than 20% just this week after announcing that its latest Bluebird 6 satellite was assembled, tested, and ready for launch and that its launch schedule appears to be on track.

“AST reiterated its expectation of launches every one to two months on average during 2025 and 2026, which is expected to result in between 45 and 60 satellites in orbit by the end of 2026,” wrote Louie DePalma, an analyst at William Blair. “Reaching 45 to 60 satellites in orbit is significant because it allows for continuous broadband coverage for AST’s core markets in the U.S., Europe, and Japan. We view this update positively.”

Space and satellite stocks Rocket Lab and Planet Labs ascended alongside AST Thursday. But all of these stocks are, in a sense, drafting off dynamics being driven by Tesla CEO Elon Musk’s SpaceX, the leader in the private space sector.

The company has played a key role in lowering the costs of space launches, thereby “fostering intense competition and accelerating innovation across the sector. This has led to significantly lower launch prices, reshaping the economics of deploying large-scale Low Earth Orbit constellations,” wrote Barclays analysts in a recent note on the outlook for the satellite industry. This has opened up new possibilities such as providing consumer broadband services, they noted.

Bell Canada to roll out direct-to-cell satellite service in 2026

“AST reiterated its expectation of launches every one to two months on average during 2025 and 2026, which is expected to result in between 45 and 60 satellites in orbit by the end of 2026,” wrote Louie DePalma, an analyst at William Blair. “Reaching 45 to 60 satellites in orbit is significant because it allows for continuous broadband coverage for AST’s core markets in the U.S., Europe, and Japan. We view this update positively.”

Luke Kawa8h

Bloom Energy falls as Mizuho downgrades the stock to “neutral” from “outperform”

There’s an immense need for power to fuel the AI data centers playing the starring role in driving up electricity prices.

Mizuho just isn’t sure that the high-flying fuel cell company Bloom Energy is well placed to provide it.

Analyst Maheep Mandloi cited the firm’s internal constraints on growth in lowering his rating on the stock to “neutral” from “outperform,” suggesting that Bloom will likely need to develop a bigger pipeline of customers before expanding its manufacturing footprint.

Still, he hiked his price target to $79 from $48 while downgrading the stock.

Last week, JPMorgan flagged that retail traders were beginning to sour on the shares, which had enjoyed a massive run-up that kicked into high gear thanks to a deal with Oracle announced in late July to supply power to data centers.

Wall Street is broadly negative on Bloom Energy, relative to most of the universe of the stocks the sell side covers. Its consensus rating, per analysts polled by Bloomberg, is just shy of 3.35. For reference, that’s a worse average rating than nearly 90% of the stocks in the S&P 500 (which Bloom is not a part of).

Jefferies downgraded the stock last week on the same day Bank of America analysts wrote, “We are still not buying into BE’s AI hype.” Nonetheless, most are still revising price targets higher to account for the stock’s move. But all that leaves the average price target well below where the shares are currently trading.

Matt Phillips8h

Western Digital, a top S&P stock over the last month, is attracting retail traders

We’ve been covering the sudden sexiness of data storage as a market theme a lot recently, with Western Digital and Seagate Technology Holdings turning into top trades of 2025.

The makers of relatively affordable data storage devices known as hard disk drives were leading the S&P 500 until recently, when they were supplanted by an index newbie.

WDC JPM Retail Radar Chart — A chart from JPM’s Retail Radar note showing increased retail buying of WDC.

But Western Digital, which has been trading at a discount to Seagate due to its spottier earnings record over the last couple years, seems to have suddenly found fans among the unwashed stock-trading masses, with JPMorgan’s always informative Retail Radar note spotlighting “strong buying in WDC rally” Wednesday as they climbed aboard a rally that has carried the shares up more than 60% over the last month.