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Dollar stores have lost their safe haven status

Dollar Tree and Dollar General are getting trounced in the stock market while most retailers tread water.

Yiwen Lu

With the job market sending some concerning signals and consumers still bemoaning high prices, there’s one niche of the stock market that’s doing surprisingly bad: Dollar stores.

One would expect these stores, whose names are synonymous with value and thrift, to do better than most retailers during times when the economy is coming under some pressure.

At key points in the past few decades when nominal US economic growth has been decelerating sharply — like during the global financial crisis, in the aftermath of the US shale bust in mid-2015, after growth peaked in the pre-pandemic cycle in the middle of 2018, or the 2022 bear market for the S&P 500 — dollar stores have outperformed, as has their sector, consumer staples.

As Dollar General CEO Todd Vasos put it back in 2020, “we do very good in good times, and we do fabulous in bad times.” 

But that hasn’t been the case this year: Dollar Tree is down 53% in 2024 heading into Monday’s session, while Dollar General is off nearly 40%. Meanwhile, the S&P Retail Select Industry Index, an equally weighted basket of major US retailers, is marginally positive year to date.

This appears to be a dollar store issue, not one for the sector at large: Consumer staples is trouncing the equal-weight retail group this year.

Dollar Tree saw 0.5% decrease in average tickets despite a slight same-store sales gain, meaning that there were more shoppers but they were spending less, sending stocks to the company’s lowest level since 2015. Dollar General, meanwhile, recently reported that low-income consumers were pulling back their spending on necessities.

One possible reason is that despite their namesakes, dollar stores are not offering that many value goods anymore, as competitive pressures rise. Walmart, for example, has increased their convenience offerings and attracted more shoppers who were looking for lower prices in the latest quarter, while lower prices have also paid off for Target.

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The FDA specifically called out Hims in the announcement. Additionally, Department of Health and Human Services' General Counsel Mike Stuart said in a post on X on Friday he has referred Hims to the Department of Justice "for investigation for potential violations by Hims of the Federal Food, Drug, and Cosmetic Act and applicable Title 18 provisions."

In a statement, Hims said the company "has always operated with a deep commitment to the safety and best interests of consumers and in compliance with applicable law."

"We have a long history of successfully working with regulators, and look forward to continuing to engage with the FDA to ensure safe access to affordable healthcare," they said.

This marks a significant shift in tone from the FDA, which has done little to prevent companies like Hims from marketing copies of Novo's lucrative weight loss drugs.

Shares of Hims fell 14% after hours. The stock had already taken a hit after FDA Commissioner Marty Makary said in an X post on Thursday that the agency would “take swift action against companies mass-marketing illegal copycat drugs.”

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The FDA specifically called out Hims in the announcement. Additionally, Department of Health and Human Services' General Counsel Mike Stuart said in a post on X on Friday he has referred Hims to the Department of Justice "for investigation for potential violations by Hims of the Federal Food, Drug, and Cosmetic Act and applicable Title 18 provisions."

In a statement, Hims said the company "has always operated with a deep commitment to the safety and best interests of consumers and in compliance with applicable law."

"We have a long history of successfully working with regulators, and look forward to continuing to engage with the FDA to ensure safe access to affordable healthcare," they said.

This marks a significant shift in tone from the FDA, which has done little to prevent companies like Hims from marketing copies of Novo's lucrative weight loss drugs.

Shares of Hims fell 14% after hours. The stock had already taken a hit after FDA Commissioner Marty Makary said in an X post on Thursday that the agency would “take swift action against companies mass-marketing illegal copycat drugs.”

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Airline stocks are surging on Friday, as the market appears to be pricing in some medium-term oil pricing relief following talks between the US and Iran. Iranian officials referred to the meeting as “a good beginning.”

Shares of budget carriers, which have tighter margins and are more sensitive to fluctuations in fuel costs, are leading the surge. Frontier Airlines and Allegiant up more than 13%, while major airlines like United Airlines, American Airlines, and Delta Air Lines are also up at least 6%. JetBlue and Alaska Air are similarly up about 6%.

The market more broadly is rebounding on Friday, with the S&P 500 up 1.6% and bitcoin recovering some of this week’s losses.

Airlines have been volatile to start 2026 amid geopolitical tensions, varying annual forecasts, and the impact of winter storms.

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The AI supply chain is soaring thanks to Amazon’s capex budget

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Amazon’s plan for $200 billion in business investment this year was the exclamation point to end a reporting period that saw every Magnificent 7 hyperscaler that provides guidance offer a 2026 capex budget well above what Wall Street had anticipated.

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Big Tech capital expenditure soared in 2025. It’s going up another 50% in 2026.

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For memory chips, the “parabolic price hike” is continuing to ramp higher

The remarkable run-up in prices for memory chips continued into early February, analysts at Bernstein Research say, driven largely by data center demand from hyperscalers and cloud service providers (CSP).

Prices for NAND flash memory wafers — a type of memory used in devices, as it retains data even when powered down — soared 35% between the end of 2025 and February 2.

Spot prices for DRAM — ubiquitous short-term data storage chips — jumped about 28% in that period. But that massively understates the remarkable shift in pricing for what were long seen as commodity tech hardware inputs. DRAM prices are more than 2,000% over the last year, while NAND prices are up more than 600% in that period.

The ongoing momentum provides still more support for memory chip plays like Micron and Sandisk, which have been big market winners in recent months.

In a note published earlier this week, Bernstein Research analysts wrote:

“The parabolic price hike continued in Jan. Indicated price increase for 1QCY26 is much stronger than we expected and we hence see upside to our near term memory pricing projection. Unrelenting CSP demand remained the main driver. PC and Mobile demand hasn’t been destroyed yet because of lean inventory & pull-forward purchase. Going forward price hike is expected to continue but likely at a slower rate, as PC and Mobile demand should contract meaningfully this year. Price however may stay elevated throughout this year, supported by CSP demand.”

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