The Dirty Secret of Household Spending Discipline

By:  Charles Payne

 

 

 

 

 

Recently, the adjusted for inflation wage growth recently broke out to its highest level since 1980. While this is a stat many view with suspicion, such as purchasing power parity (PPP), it could hint at more purchases from consumers.

 

 

On that note, consumers have played it real close to the vest, even with the recent rebound in buying the number that belie the notion of higher wages and dismisses the idea of those who are eager to spend because of cheaper gas and lower prices.

However, it’s not just the recent sluggish retail sales results; this phenomenon has lingered throughout the Great recession when our credit card debt peaked. Since its increase over the last few years, the pace is significantly slower than the last uptrend and it is $150 billion less than the top.

 

 

 

There’s no doubt many are still in shock from the recession and are frustrated with the flaccid recovery, but that cushion is gone and rebuilding it seems, is like an impossible task. American wealth is a little more than half of what it was in 2007.

 

 

 

For years, free spending in America powered consumer discretionary stocks well above consumer staples, but now it’s all about the basics. So, what does this mean for the economy and your 401K?

 

 

 

 

The Top of the Mountain- They Want to Own It

Silicon Valley giants continue on their quest to conquer the world by going beyond their core competence. The more ambitious the next project is, the more attractive it becomes. Forget about the wars around the world, the closest thing to Game of Thrones is the battle to be the last man standing.

We came into 2015 with rumors about Google wanting to get into the wireless service business; and they confirmed as much in March. According to the details released Wednesday, the search giant will only make customers pay for data they consume. Initially, the plan will only work with Nexus phones, and this could be a potential game-changer in an industry already struggling with falling prices.

Now, look at Tesla shares. Tesla has been on fire as anticipation has grown…the company will unveil its battery systems for homes and businesses. The news is expected on April 30th and it will have home versions that provide 10 Kilowatts (kW) of kilowatt-hours (kWh) for $13,000, and (in California, there’s a 50% rebate) already in place as a pilot program run by Solar City.

Thursday’s Session

Earnings are coming in furiously and its feast or famine. There are decided winners and loser, but the middle ground is also compelling considering so many companies continue to miss on revenues and the street has yet to decide those that get a free pass.

 

 

Right now the market is looking to open lower, but this is the kind of session that’s the perfect test to see if there really are smart buyers waiting to buy dips because there were few genuine disasters, but factoring in valuations, it’s easy to see how sitting on your hands might be the best choice. I’m also considering raising some cash, so be on the lookout for actionable alerts.

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