According to Wells Fargo’s Ike Boruchow, it’s “increasingly clear that retail is under significant pressure” adding that store traffic remains weak (likely to get softer this week due to Easter shift), while markdown rates are not only elevated on an annual basis, but also getting sequentially worse. He concludes that “retailers are running out of time” to reach elevated Q1 numbers as consumption is failing to rebound.
Whether due to displacement (from online vendors), due to concerns about border tax, or simply because the US consumer’s plight – despite the recent surge in Trump induced animal spirits – has not changed one bit, the pain for US retailers continues, and as a result, the outlook for malls and other retail-associated secondary industries will remain bleak for the foreseeable future.
Desutche Bank is gravely concerned: We’ve grown increasingly concerned about U.S. Used Vehicle Pricing down 7.7% yoy during February, per NADA. A decline in used prices has been widely anticipated given a significant increase in used vehicle supply (off-lease vehicles). But the magnitude of the recent drop was nonetheless surprising (February’s drop was largest recorded for any month since Nov. 2008). Used prices have a significant impact on New Vehicle demand/pricing through their effect on affordability (most new car purchases involve a trade-in).
Let us hope this is all because consumers are focused on buying houses instead.