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Here's the new worry that's consuming Wall Street

It's Wall Street's latest worry: The current state of the American consumer.

Despite a blockbuster June employment report, buffeted by positive auto sales and same-store retail sales numbers, many investors and strategists worry that American consumers just don't have the cash, or the willingness to spend it, that is required for the recovery to continue.

These concerns have recently come to the fore, as companies from Wal-Mart to Rent-A-Center have warned that slack consumer demand will weigh on results.

Read MoreUS job rebound not spurring spending, Wal-Mart's Simon says

In a filing released on Thursday, Rent-A-Center CEO Robert Davis said that "Macro-economic pressures continue to burden our financially constrained consumers contributing to softer than expected demand in our U.S. business segments. Consequently, revenue and earnings for the second quarter 2014 will not meet expectations." (In response, the stock dropped by more than 10 percent on Friday.)

Some on Wall Street are ringing the alarm bell as well.

Nicholas Colas, chief market strategist at ConvergEx Group, warned on Friday that there's a chance stocks will get rattled by "a shallow U.S. recession starting early next year," caused by "slack consumer spending and a slower labor market," due in part to the Federal Reserve reducing its stimulative measures.

"From a jobs perspective, things are slowly healing. But I do think that the desire to spend is still somewhat sketchy," he told CNBC.com. "We're still at low levels of confidence compared to other recoveries."

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Betting on the consumer has not been a great call this year. The S&P 500's consumer discretionary sector is up less than 1 percent in 2014, compared with a 6 percent rise for the index as a whole, making it the single worst-performing sector. (Of course, this comes after several years of outperformance.)

A Pier 1 Imports store in New York.
Craig Warga | Bloomberg | Getty Images
A Pier 1 Imports store in New York.

Some light on the consumer should be shed this week, as investors chew over preliminary consumer sentiment survey results for July, as well as retail sales numbers for June.

Societe Generale senior economist Brian Jones, for one, is looking for good news. After all, he notes that auto sales rose 1.2 percent in June, same-store sales tracked by the International Council of Shopping Centers rose a much-higher-than-expected 5.9 percent and nonfarm payrolls increased by 288,000 in June (a number Jones nearly nailed on the nose).

"To be downbeat on the consumer in this environment is kind of crazy," he proclaimed.

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This week's earnings reports could also tell us a bit about the state of the consumer in the second quarter. Scott Nations of NationsShares is looking out to Taco Bell and KFC owner Yum Brands, which is expected to report on Wednesday after the close.

"Yum is really tied to China, so the actual earnings-per-share number might say more about the consumer in China than it does here. But I'll pay attention to the commentary—what they have to say about the consumer in the United States, and whether or not higher gas prices are really pinching the consumer," Nations said.

—By CNBC's Alex Rosenberg

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