Shopping

With the Fed balance sheet set to balloon to $9 trillion, effectively setting this coming Spring as the watermark of ‘peak’ stimulus, there is still plenty of zizz in the pop from the Central Bank sponsored punch bowl. And – analysts are quick to point out – it takes one year for that peak stimulus to start to hit the economy suggesting the Fed-fired boom, may continue to boom-boom for some time. Households too are awash with cash. The chart depicting how much has been stashed at the bank looks like the vertical ascent of a freshly minted faux-lined dog coin. Until recently, that is. The fur has started to fly in crypto land, to what end no one seems to know. Whilst many at the lower-end of the income stack are feeling the pinch of $4 gasoline and multi-decade high price inflation, there are others who are not. And other than speculating on dog coins they are also out pumping the mall. The Q3 reports from many retailers spoke of a strong pick up in growth, both in the traditional bricks-and-mortar, and online. Walmart spoke of ‘remarkable’ growth, Urban Outfitters revved up the outlook for Q4 as the till ran hot, as did Dick’s Sporting Goods, Five Below and Costco. Amongst others. Whilst the supply chain left some store managers pacing the parking lot, waiting for stock to arrive, it appears many have plenty enough on the shelves. “Bottom line, based on the incredible efforts of our team, we feel good about our inventory levels heading into the holiday season” grinned Christina Hennington, Target’s Chief Growth Officer; a job title yet to make across the pond. Key for many, is a domestic supply chain – itself not without its challenges – but keeping it domestic is a whole lot easier than getting a container through a chokka full Long Beach port. The retail space is well set for 2022. With many economists paring growth outlooks as the world awaits cold details on the impact of the latest variant, the reality for many is a growing acceptance that COVID is not going away. We all just have to live with it. Adapt. Give it the stiff upper lip and continue to spend. The hand off from goods to services will happen as this acceptance spreads and, perhaps, as vaccines and natural immunity offer a degree of protection to further variants. This leaves the current beaten up valuations of many stocks tarred as ‘reopening plays’ – from medical devices to restaurant suppliers – looking exceptionally attractive. Time to bat on.