Market Feeling Consumer Spending Slowdown
This is not a good day for consumer discretionary stocks. From housing to restaurants to hotels to autos, companies are reporting notably slower sales, and they are not anticipating much of a rebound in the second half of the year.
In hotels, Starwoodlowers guidance, and notes that timeshare sales declined 25 percent in the second quarter, with average prices down 19 percent.
In builders, Ryland reported a large loss, with large writedowns continuing for land and inventory,while existing home sales in June were just dismal--the lowest level going back to January 1999. The inventory level rose to 11.1 months, near its highest level since 1985.
In autos, autos, Fordreported a large loss, North American sales were worse than expected. One analyst noted that Ford burned through $3.1 billion in the last quarter, with $26.6 b left.
In restaurants, Chipotlemissed earnings and estimates and noted that sales were slowing in June and July.
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