Wall Street Sounds Alarm on Consumer Stocks Ahead of Midterms
The smart money on Wall Street is more worried about the GOP's midterm prospects than the average investor, and it's partly due to Home Depot and McDonald's. The high-paid traders on Wall Street have noticed that consumer-focused stocks are getting crushed, signaling weaker economic trends in middle America.
This trend has been particularly evident in Home Depot and McDonald's, which have underperformed the S&P for more than a year. Larry McDonald from the Bear Traps Report points to these charts as 'painting an ugly picture' for Trump and the Republicans.
Despite the major indices being at record levels, with strong employment and GDP numbers, the trend in consumer stocks suggests that working-class consumers are cutting back due to rising prices and tepid wage growth. This could be a warning sign about President Trump's working-class base.