As US stock market hits new highs, 2 of 3 Americans are cutting back on spending, survey shows - AP News
1 min readAnalysis by AlgoThesis Editorial Desk
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The story
A new survey finds two-thirds of Americans are cutting back on spending even as equity markets hit record highs, with consumer sentiment falling to all-time lows amid elevated gas prices and cost-of-living pressure. The divergence between asset-price optimism and real consumer stress sets up a classic late-cycle rotation risk where discretionary spending names face earnings pressure while the wealth-effect narrative breaks down.
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The house read
Wrong ifIf the Fed pivots dovishly or a strong NFP print revives the soft-landing narrative, consumer discretionary snaps back sharply and the pair trade loses on both legs; equity-market wealth effect could also continue to dominate survey-measured pessimism as it has in recent cycles.
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