From News To Moves
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Consumer confidence has slid to a three-year low, just shy of its worst level ever. That doesn’t signal the end of spending but a reshuffling. Here’s how you can follow and benefit from the shift.
By Austin Payne
The University of Michigan reports that the U.S. consumer sentiment dropped again in early November and is at its lowest level in more than three years. The decline is steepest among lower- and middle-income households, which is no surprise: everyday Americans are most concerned about the deteriorating labor market, the government shutdown, and the sticky inflation data isn’t helping.
The backdrop of a stock market that has trudged on through record highs showcases the new reality of a split-screen economy. Wall Street is celebrating while Main Street is cutting coupons. This dual reality will not last forever. The grocery bill, not the S&P 500, is telling us the real story.
Weak consumer confidence does not mean households stop spending altogether; everyday expenses like groceries and gas don’t become any less essential just because consumers are anxious. What changes is where those dollars land. Families under pressure trade down to cheaper options and bulk purchases, which reshapes revenue flows across retail.
When people are nervous about jobs or incomes, buying a home feels like an even heavier commitment, one that requires a lot of optimism to stomach. Mortgage rates don’t scare buyers as much as job insecurity. Renting, on the other hand, feels more flexible. That dynamic increases demand for rentals while slowing mortgage activity.
When Americans’ wages can’t meet their monthly expenses, alternative means step in. Often, credit cards fill this gap, as households lean more on borrowing when confidence is weak.
Lower confidence does translate into slower consumer spending overall, particularly in the area of discretionary expenses, which ultimately dampens tax revenues for cities and states. At the same time, investors often respond to harsher market conditions by seeking safe yields in municipal bonds, creating a paradox of municipal panic: broke cities with booming municipal debt bond markets.
Consumer confidence just hit a three-year low, but investor sentiment remains strong. We are seeing essential consumer spending reshuffling into more value-driven alternatives. Follow the flow of money into value retail, rental housing, credit rails, and municipal bonds, which stand out as beneficiaries when stressed households navigate inflation and job uncertainty. Here are our top picks. Click the tickers below to learn more:
Weak confidence channels consumer spending toward value retail, rentals, and credit, while savings seek the stability of municipal bonds. ETFs across retail, real estate, fintech, and municipal bonds allow investors to mirror this reshuffling without overconcentration, turning Main Street anxiety into a structured portfolio strategy.
Gold may shine in uncertain markets, but the IRS knows how to dim its glow. The way the tax code treats bullion and most gold ETFs can eat into returns. For investors, the metal still matters as a hedge, but the structure you choose is just as important as the precious metals.
Bourbon’s pandemic boom has turned into a bust, with Kentucky distillers holding a record 14.3 million barrels. Here’s how to tap the changing alcohol industry trends and invest in the next wave of spirits sector growth.
A housing shortage is causing rents to swallow paychecks, keeping young adults at home, and delaying household formation. Here’s how investors can play the housing shortage.
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