Another reminder of the stretched consumer/Other stuff

Jay Powell specifically said yesterday in response to a question from Louisiana Senator Kennedy that he is currently giving no guidance as to when they might cut. That likely takes any potential for new news today off the table when he presents to the House. One thing we didn't hear anything about yesterday was color on the Fed's balance sheet and where it might end up in size when QT ends. 

As if we needed any new reminder on the stretched condition of many US consumers, we heard from Helen of Troy yesterday whose business is about 50% 'home and outdoor' with brands like Hydro Flask, Osprey and Oxo and the other half 'health and wellness' making products under the brands Braun, Curlsmith, drybar, Vicks and Revlon. Their products of hair dryers, curling irons, shavers, brushes, combs, mirrors, etc... are sold in all the major retailers, warehouse clubs, grocery, dollar and drug stores. 

Its stock fell 28% yesterday in response to earnings and they said this:

"As has been widely reported, the macro environment and the health of consumers and retailers has worsened. Consumers are even more financially stretched and are even further prioritizing essentials over discretionary items. Specific to our business, we have seen some areas become more challenged over the last three months. For example, an unexpected slowdown in the global outdoor category impacted sales of our packs and accessories. There was also more pressure in the specialty beauty channel and mass beauty overall, especially in beauty tools under $100. Also, more discretionary household items like dry food storage continue to trend down."

Also, "We've heard broadly from mass retail that traffic overall is slower throughout the country and promotional pressure is increasing. In reaction to these dynamics, retailers are managing inventories more closely to account for the slowdown, and some are implementing new systems to allow for just in time inventory management. All of this exposes us to more volatility and less visibility into order volumes and timing."

I'm sorry but this is nothing but consumer recessionary type language. Again, I believe the Fed will be cutting rates in September. That said, the days of zero rates are over and the Fed's ability to respond to economic downturns is much more limited this time around because of the inflationary possibilities again if they do too much.